Colorado and the nation have felt the impact as the world聮s oil-producing countries raised crude oil prices in recent months, particularly in California, where premium gas has been going for as much as $2.139 a gallon.
According to University of Colorado at Boulder economist Richard Wobbekind, higher gas prices this summer will effect Colorado聮s economy to varying degrees. But overall Wobbekind predicts the strong economy will offset any major setbacks.
A summary of how Wobbekind expects higher prices to effect Colorado follows.
* The most negative impact will be felt by lower income people living outside of urban areas who have to commute significant distances to work. They will experience higher transportation costs.
* The Eastern Plains area, although not a tourist hotspot, receives a lot of drive- through traffic, bringing in revenue from food, lodging and gas sales. But those revenues could be hurt this summer if people who own vehicles that get poor gas mileage stay closer to home because of the increase in travel costs.
* But, the higher prices might make Coloradans do more in-state traveling, offsetting the loss of revenue from out-of-state travelers.
* High gas prices could alter the type of vehicles being bought this year. Having benefited from low gas prices last year, consumers did not take fuel costs into account when purchasing automobiles, something they now may have to do.
* Currently, the effect on the economy has been minimal. But if high gas prices are sustained, an overall slowing down of the economy is more likely
* The rising level of income in the US economy, which has been very healthy in recent years, will most likely offset the impact of the gas prices.
Experts are predicting that gas prices will drop below the $1.50 mark during the summer, which is a much more realistic price range for gas, according to Wobbekind.