Gasoline Prices Rising, Could Top $3 A Gallon: GasBuddy Analyst

The price of a gallon of Regular-grade gasoline in Champaign-Urbana took a 12-cent jump last week, according to the price-tracking website GasBuddy.com.

Average price increases over the past week were milder on a statewide (3.5 cents per gallon) and nationwide (2.2 cents per gallon) basis.

But GasBuddy analyst Patrick DeHaan says that overall, the rise in gasoline prices is a steady one. In the past year, the average price for a gallon of Regular increased 43.7 cents nationwide and 45.5 cents in Champaign-Urbana.

As of Monday, GasBuddy reported that a gallon of Regular cost an average $2.87 in Champaign-Urbana, $2.89 for the state of Illinois and $2.91 nationwide.

DeHaan says the national average gas price has risen above $2.90 for the first time since mid-June, and could soon hit the $3 mark for the first time in four years. 

“It’s something that could happen in the next month or two, depending on exactly what happens when those Iran sanctions come into force again on November 4th,” said DeHaan. “Will OPEC increase production when it meets a month later in December?”

DeHaan says gas prices are rising due to strong demand, countered by a tightening of the oil supply, due to U-S sanctions against Iran that are expected to be reinstated next month.

As for the steeper hike in gas prices in Champaign-Urbana, DeHaan says the Champaign-Urbana area is seeing a practice called “price cycling”. That’s when gas stations keep retail prices steady for several days or weeks, even as wholesale prices change. Then, they use a bigger price change to catch up.

“In this case, there is so much of an increase to pass along, it tends to be larger than what you see in other areas,” said DeHaan. “So, consider it a method of catching up.”

DeHaan says price cycling is most common in the Great Lakes states, including Illinois.