Idaho Gas Prices Up 50 Cents in a Month: But AAA Report Doesn’t Expect Them to Eclipse $3 a Gallon By the End of the Month

By Joe Estrella, The Idaho Statesman, Boise

May 9–Treasure Valley gasoline costs climbed an average 11 cents last week, AAA Idaho said. That means pump prices have risen 50 cents a gallon in the last month.

But AAA said new government reports showing higher U.S. gasoline inventories may keep Idaho motorists from seeing the $3-a-gallon mark by month’s end after all.

“Things have stabilized a little, which could mean less price pressure at the pump,” AAA Idaho spokesman Dave Carlson said.

AAA Idaho said the price of regular unleaded — the most popular blend on the market — averaged $2.84 a gallon Monday. Statewide, the average was $2.87.

Prices nationwide stabilized as crude oil prices fell $4 a barrel after U.S. government data showed an increase in gasoline supplies. The result was a 1.5 cent decline in the U.S. average price to $2.90, AAA said.

Geopolitical concerns — including unrest in Nigeria, violence in Iraq and rising resource nationalism in South America — continue to underpin oil prices, Carlson said.

The most pressing source of anxiety is the possibility that Iran, OPEC’s No. 2 producer, could cut supplies because of international pressure to modify its nuclear program.

Venezuela’s oil minister recently added to potential concerns Monday when he said OPEC is not likely to decide on a production increase at its June 1 meeting in Venezuela because the group has little additional capacity it can summon.

Oil prices fell to $69.77, down 42 cents, on the New York Mercantile Exchange on Monday.

But even without any new geopolitical pressures, Carlson warned that Treasure Valley prices could still go higher, as area pump prices catch up with the U.S. average.

Meanwhile, the recent spike in local gas prices represents a growing threat to the area’s housing boom, as developers boost the price of homes to cover their increased costs, said Don Hubble, owner of Hubble Homes in Meridian.

The local home-building market is coming off a potentially record-breaking pace in the first quarter of 2006 that saw home sales in the Valley jump 39 percent from a year ago.

Hubble said one of the biggest concerns is that rising energy prices will make consumers think twice about buying a home in Canyon County, where home prices are generally lower than in Ada County.

“Before, the idea of a 25-or-30 mile commute wasn’t a problem,” Hubble said. “But higher gas prices are going to drive people closer to their jobs. It’s going to take a little time, but my concern is that these gasoline prices will change the consumer’s mindset.”

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