Why Gas Prices Are At a Seven-Year High

Pain at the pump. It's back, and it has all of us motorists in a fool mood. No one likes paying a lot to fill up each week, but late last week, gas prices reached their highest levels in nearly seven years. And the real kicker is that they don't show any signs of going down, as they typically do this time of year. So what is behind the big price increase?

Last week the national average for unleaded gasoline in this country hit $3.38 per gallon. Last year at this time we were all paying around $2.16 per gallon. According to experts with the website Gas Buddy, part of the issue we're facing is due to an energy crisis overseas. The Dayton Daily News reports that part of the trouble is China. The country is running low on coal for its power plants, so the Chinese are buying as much coal, natural gas, and oil as they can. There is also an ongoing natural gas shortage happening in Europe.

The other culprit in any spike in gas prices is our friends with OPEC. And as the Dayton Daily News reports, two weeks ago OPEC announced that it would not raise oil production to match the increased world demand. After that announcement, oil jumped to its highest price in seven years. And that is why gas prices have marched higher the past two weeks.

I took a look at Gas Buddy this morning to see what prices were like across the city of Cedar Rapids. Most are either right at $3.00 per gallon all the way up to $3.14. Some of the cheapest prices in the state can be found in Waterloo and Davenport at around $2.84 per gallon.