The auto market is still trying to recover from what transpired a few years ago but its progress is being hampered by high gas prices, which has been sparked by unrest in Iran. The cost of a gallon of gasoline has now passed $4 a gallon and there are signs that the cost could even reach $5, which will be bad for so many reasons.
It’s not just the auto industry that will suffer if the price of oil keeps rising the economy will as well because consumer confidence will be knocked. The US economy is still in a very weak state and it was thought that trouble in Europe would be the biggest threat, but things will soon settle now that a deal has been reached to help bailout Greece.
There could not be a worse time for the price of a gallon of gas to go up because the Auto Shows are now in full swing, and they need consumers to not have to worry if they will be able to afford to run a new vehicle, which could deter them from making a purchase. However, this could work in the favor of the more fuel-efficient vehicles but then again you will have to pay a higher price for these, which could cause an issue.
We have learned from an article here that the national average in April could increase to around $4 to $4.25 per gallon, this could beat the previous all-time high of $4.11 back in June 2008. If this does happen then consumers will not only be affected but also businesses as well because their gas bills could begin to soar out of control, which is something the Obama administration does not want.
There’s another worst-case scenario because some analysts are predicting prices could increase to $5 per gallon, which if happened would do serious damage to not only the US economy but the rest of the world as well. Having said that there seems to be a consensus that the price of a barrel of oil is about to hit its peak and could begin to fall once again, but don’t expect the price you pay at the pump to fall right away because we are always the last to see a benefit.