A few months ago, the DOE’s Energy Information Administration (EIA) predicted that the price of fuel would be dropping fast and far over the course of the next couple of years, yet fuel prices haven’t started to plummet as promised. In fact, we have had three straight weeks of increases in average nationwide diesel prices. So what gives?
The EIA has again projected that even though we’re seeing a temporary increase, fuel prices will go down. In fact, they’re projecting that we’ll see a decrease of about 10 cents per year for the next two years. Historically since the mid 90’s, the EIA has been spotting trends ahead of time and predicting fuel prices with a great deal of accuracy. In fact, this is the first time since the 90’s that the actual price of diesel has been higher than their projected price.
So what does this mean for the price at the pump this year? According to the EIA, the nationwide average for the year will be $3.77 per gallon, a drop of 15 cents from last year.
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Sorry to burst your bubble but, no. The long term trend for fuel prices will be forever upward. World oil production has been level for several years while demand continues to grow. Fracking, tar sands production, and deep water drilling is only profitable while prices are high. Most of the world’s largest fields in Saudi Arabia, the North Sea, and Mexico are in steep decline. Resource depletion will be the defining issue of the 21st century. In short, we’re all screwed and should be making plans on how to survive at the end of the petroleum age.
Uh-huh, sure.
Well said Rick!
They have had the chance to lower the price and refused. The oil production was higher than was being consumed, demands were down so rather than lower the price they lowered production. The fuel prices dropped about 30 cents which they’ve since made up for