Gasoline prices may hit $4 a gallon in June

By Thomas V. Bona

BusinessRockford.com

It’s not a foregone conclusion, but be forewarned. By next month, you may be paying $4 for a gallon of gas.

“Unless something gets under control, it looks like it’s headed that way,” said Bill Fleischli, executive vice president of the Illinois Petroleum Marketers Association/Illinois Association of Convenience Stores.

The U.S. Energy Information Administration revised its short-term energy outlook Tuesday, predicting gas prices would peak at an average $3.73 a gallon nationally for the month of June.

But that means prices will be higher at times nationally. And Illinois — with high fuel taxes and environmental rules — typically has higher prices than the national average.

The national average price of regular unleaded was just shy of $3.62 a gallon this morning, according to AAA’s fuelgaugereport.com, rising 28 cents in the past month. The Illinois average was at a record $3.76, up 30 cents in the past month.

The Rockford metro area rose two cents today to a record $3.70 a gallon, a 25 cent increase in the past month. Several stations within the city limits were charging $3.79 a gallon earlier today, according to Illinoisgasprices.com.

Ali Sahori owns Way Low, an independent Citgo station on West State Street, and often charges less than market prices to drive up sales. But while his volume is up over last year, his profits are down because of the sales. If he charged full price all the time, he thinks he’d see a big drop in volume and would lose even more money.

“They tell us, ‘Before, I was going out every week, now I go out once a month,’” Sahori said. “People just buy gas to go to work and come home.”

Fleischli said the gas stations he represents report a 1.5 percent to 2 percent drop in sales so far this year. That’s a big deal: Typically a 1 percent increase is considered a good year.

“Their credit lines are maxed out because of the high wholesale, their volumes are down and the inside sales are off because people are more concerned about their spendable income,” Fleischli said.

The U.S. Energy Information Administration predicts high prices will drive down demand this year, and eventually that and other economic issues will cause prices to fall some. While the agency predicts prices to average $3.66 a gallon this summer, it would drop to $3.44 next year. But that’s 20 cents a gallon higher than what the agency predicted last month.

Sahori said he expects to see $4 gas this summer. His station has an electronic price sign, so it’s just a button push away.

Staff writer Thomas V. Bona may be contacted at 815-987-1343 or tbona@rrstar.com.