LITTLE ROCK, Ark – As summer approaches it usually means more travel for Arkansans. It also means an annual hike in gas prices as there is more demand.
The Colonial Pipeline shutdown will likely affect inventory across the eastern coast and southeast region of the US, but Chief Economist and State Economic Forecaster at UA-Little Rock Michael Pakko thinks it’s only a part of the equation.
“The fact that we have this disruption in the Colonial Pipeline really just adds to that momentum that was already building,” Pakko said.
Arkansas has not seen near the price increases in gasoline over the past month compared to the national average.
According to AAA prices, the average price across the country was a month ago was $2.87 it is now $2.97.
In Arkansas, a month ago it was $2.68 and now it is $2.72. It has shown to be more stable than areas directly affected by the Colonial Pipeline. Pakko said it’s good to be a driver in Arkansas right now.
“The price increases over the past week I’ve been closer to seven cents a gallon at least and at least we’re not in those areas,” Pakko said.
Pakko said it is tough to forecast what gas prices will be in the next week or month because of so many factors, but says the longer the shutdown of the Colonial Pipeline lasts, the more drastic those effects could be.
“If the disruption lasts a couple of days of the price spike, for what it’s worth, will probably be of limited duration, it will just appear as a blip along the path of rising prices leading up to Memorial Day,” Pakko said.
Part of the US Department of Transportation’s emergency order is to relieve some of the regulations on transporting fuel products.
Despite being able to get product out and not have any interruptions, the cost of transporting and logistics still could lead to small price increases.
“Those will undoubtedly help the product of the product gets to places where it’s the most needed, but at the same time it’s not necessarily going to stop price increases,” Pakko said.
Pakko does not advocate for people to rush out and fill up their vehicles and gas cans but he does recommend being more mindful of gas consumption for the next week or so.
He says hopefully the pipeline will be back in working order soon and prices will just be the normal type of high for this time of year.
“What is this once this current situation is resolved things should go back to a relatively stable environment,” Pakko said.
For more information from the AAA site visit HERE.