In Canada the price of gas has averaged over $5 /gallon for more than two years. In Western Europe gas prices are $6-$7/ gallon and have been for several years. The United States has always been able to keep the prices lower mostly because of lower fuel taxes. Those days are coming to an end, unfortunately, and the financial adjustment to the new reality for the average American will be severe.
The US prices could well surpass $5 in 2011 and will almost certainly by 2012. The demand for oil by China,in the coming years, will put enormous upward pressure on the price of oil. The United States is the largest importer and user of oil in the world. As domestic supplies dwindle the reliance on imported oil rises and the competition for a shrinking world oil inventory drives prices ever higher.
This, unfortunately, only explains the rise in oil prices and the pressures on domestic gas prices. The other side of that discussion deals with federal and state gas taxes which are currently very low when compared to Canada and Europe. The price of gas in the US will also be driven higher by the huge increases in federal and state gas taxes that will, because of the crippling debt the nation and the states face, have the potential to rise to frightening levels.
Hate to sound so negative but we all need to be prepared for what may be coming our way.