AAA Spokesman: $5 Gas 'A Figment of Some Folks' Imaginations'

Gasoline prices are approaching $4 a gallon, but motorists shouldn’t expect them to hit $5 this summer, says a spokesman for AAA Mid-Atlantic.

“We follow gas prices very closely and my analysts are telling me $5 gas is a figment of some folks’ imaginations,” Lon Anderson told a room of business leaders, past and present public officials and transportation advocates on Monday in Gaithersburg. “They really believe that four-and-a-quarter is probably going to be about the peak and one said he would perform nude before our next meeting if it hit five [dollars], he was so confident.”

Gas prices are at an all-time high for this time of year, the Associated Press reported Thursday.

The message of $5-a-gallon gas is coming from people who would like to see it, Anderson said during a panel discussion sponsored by the Suburban Maryland Transportation Alliance.

“I heard somebody on NBC national news last night say ‘And of course we all know that prices go up and up over the summer.’ Well, they don’t at all,” Anderson said.

The traditional price peak for gas is Memorial Day, he said. Prices are forecast to reach $4 a gallon by then.

Prices “kind of cruise” through summer before dropping in the fall, when driving—and demand—decreases, he said.

“There are folks out there who are trying to emphasize that we need to move away from petroleum who would like to see the prices go to five [dollars a gallon] and they have analysts that are saying it will go to five,” he said.

Supply is up and demand is down, said Anderson, a member of a blue ribbon state commission on transportation funding that in October called for Maryland to make $870 million in new transportation investments.

“If we were just going on supply and demand, we would have cheap gas right now,” Anderson said.

Instability in the political climate in the Middle East and a decreased capacity of East Coast oil refineries are driving prices up, he said.

The sale or closure of three Pennsylvania refineries is a big part of the problem, Gregg Laskoski, a senior petroleum analyst for GasBuddy.com, recently wrote on U.S. News.

“Collectively, these three facilities produced more than 700,000 barrels per day of gasoline, jet fuel, heating oil, and diesel, or about 46 percent of the northeast's refining capacity,” Laskoski wrote.

The prospect of war between Israel and Iran also is contributing to rising prices on the futures market.

“Which tells you precisely that we don’t want to be dependent on this resource,” said Montgomery County Councilman George L. Leventhal. “We don’t want to be entirely dependent on a resource that is jacked up every time you have some diplomatic episode and where some stupid thing, some dictator on the other side of the planet affects your ability to get to work. We have to develop alternatives.”

Alternatives won’t happen unless the state makes transportation investments like the ones recommended by the blue ribbon commission, said Leventhal (D-At large) of Takoma Park.

A proposal by Gov. Martin O’Malley (D) to is key to raising the revenue necessary to make the recommended transportation infrastructure investments, advocates said.

A higher gas tax won't necessarily mean higher prices, said SMTA President Richard Parsons.

In an analysis of gas prices nationwide, “There’s absolutely zero correlation between the level of state taxation and the price at the pump,” Parsons said.

Oil companies set prices “based on what the market can afford without depressing demand,” Parsons said. “That price point doesn’t change when the tax goes up.”

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