Northwest Indiana residents with Labor Day travel plans may be hit in the pocket book by Tropical Storm Isaac this week.
According to Gasbuddy.com on Monday, the entire nation could see gasoline prices rise at the pump from seven to 10 cents per gallon as crude oil prices spike.
A check of area service stations Monday found prices of unleaded regular gasoline in Lake and Porter counties averaging $3.85 per gallon. Several stations said prices had not risen from Sunday.
Beth Mosher, spokeswoman for AAA Chicago Motor Club, said 780,000 Hoosiers are expected to travel during the Labor Day weekend with the average round trip 682 miles. Last year’s gas prices averaged $3.63 in Indiana.
Mosher said she doesn’t expect rising gas costs to affect travel.
“People have taken time off from work,” Mosher said. “They have made vacation plans. It’s a little extra bump in the gas budget.”
Mosher attributes the potential jump in gas prices to the potential shutdowns caused by Tropical Storm Isaac to Gulf oil production.
“We’re seeing about a billion barrels per day lost in production,” Mosher said. “Because of the hurricane, refineries have already shut down some production. It is having a ripple effect through the entire United States as the Gulf region supplies about 25 percent of the nation’s oil.”
Commodity futures broker and Times columnist Walt Breitinger, vice president of Breitinger & Sons LLC in Valparaiso agrees with Mosher about the effects of the potential hurricane but says other factors also come into play.
A second factor in rising crude oil prices, Breitinger said, is that Federal Reserve Chairman Ben Bernanke will speak in Jackson Hole, Wyo., on Friday
“It is anticipated, not necessarily that I believe this, but the consensus in the financial community is that he will lean towards stimulating the economy by lowering interest rates or lending requirements making more money available to the investing community,” Breitinger said.
The third variable, Breitinger said, is growing tension in the Middle East between Syria and Egypt. He said a serious military conflict could prevent or impede oil exports.
BP Spokesman Scott Dean said all eyes are focused on what is happening in the Gulf.
“That is the thing about gasoline prices,” Dean said. “I can’t speak particularly to how it will impact Northwest Indiana prices but certainly on a national level those involved in supply and demand activities are watching the Gulf Coast very closely.”