Gas Prices Rising

Like it or not, gas prices are on the rise, and some experts predict we could see $5-per-gallon gas before summer. But why?


Offset high gas prices by saving money on auto insurance.

There are a number of different reasons.

First, Americans are driving again. The Department of Transportation reports that Americans drove nearly 3 trillion miles in 2010—the most since 2007 and a 0.7 increase over 2009. As gas prices rise, expect that number to fall once again.

Second, anti-government protests in the Middle East have hurt supply. It’s no coincidence that gas prices spiked as unrest in Egypt swelled in January. With major uprisings in Libya and a mood of dissent spreading across the Middle East, supply interruptions may persist indefinitely.

Third, global demand for oil is on the rise. Nations like India, China and Indonesia are booming economically and are buying up a greater share of the world’s oil. Unfortunately, the major oil-producing nations of OPEC haven’t significantly increased supply since the 1980s. And when supply doesn’t increase along with demand, prices increase.

Finally, a weak U.S. dollar is making oil cheaper for other nations. Oil is priced in U.S. dollars, so a weak dollar gives foreign countries more buying power. The value of the U.S. dollar has dropped nearly 40 percent since 2001.

In an effort to offset rising gas prices, many drivers are looking to make their vehicles more fuel-efficient. Despite the many fuel-saving myths circulating—e.g., chemical additives—there are a few tried-and-true methods to boost fuel economy. These include:
Slowing down on the highways. Driving at 55 mph instead of 65 mph can reduce fuel consumption by 20 percent or more.
Avoiding stop-and-go driving. Accelerating and braking cause your engine to expend more fuel. If you can't avoid driving in the city, accelerate slowly.
Getting rid of “junk in the trunk.” An extra 100 pounds of weight can reduce your fuel economy by 2 percent.  

Maintaining your vehicle regularly. Keep your tires inflated, get a regular tune-up and use the correct grade of motor oil.

Another way to offset high gas prices is to save money on car insurance. Shop and compare car insurance quotes for free with InsWeb—doing so could save you hundreds each year.