Gas Prices to Skyrocket in 2011

By Matt Baume
|  Friday, Dec 31, 2010  |  Updated 6:45 AM PDT
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Gas Prices to Skyrocket in 2011

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Bad news for drivers is good news for the environment: gas prices are expected to shoot up in the next two years, reaching as high as $5 per gallon in 2012. It's already over $6 in some European cities.

Observers are optimistic that the prices will reach $4 by spring of 2011. A variety of causes could contribute to the escalation, ranging from buying habits to various wars to growing demand in smog-choked China.

Some analysts are confident that $5 gas won't be far behind, calling it inevitable. Others are sure that $5 gas will never happen, claiming that oil producers would rather subsidize their product than drive consumers away.

Gas-guzzlers are already feeling the pinch. Prices are hovering in the mid-three-dollar range right now, the most expensive they've been in a December for several years. Usually, gas gets cheaper in the winter months, but prices have been rising since September of this year.

Oil prices show signs of climbing as well, with analysts predicting that the market will force prices up. That'll translate to more pain at the pump.

The higher prices have both advantages and disadvantages. It could mean fewer people on the road, which is good for the air and for traffic. But it could also put a dent in the economic recovery if people are more reluctant to drive to stores in car-dependent suburbs.

Cities with non-car alternatives will likely reap the greatest benefits from the higher prices.
 

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