Gulf Oil CEO Says Gas Prices Will Not Go Lower
FRAMINGHAM, Mass. -- Gas prices will not go lower than the $3.20 average seen recently in the United States, Gulf Oil Ltd. Partnership CEO Joseph Petrowski told CNBC yesterday.
During the interview, Petrowski said a $3.20 average is "as low as you're going to go" because refining margins are at the lowest rates they've been during the past 10 years. "We're seeing refineries shut down here on the East Coast," Petrowski said. "I think that will portend for higher retail gas prices, as least for the next 90 days."
How high will gas prices rise? Petrowski told the news outlet that an average of $3.50 per gallon will likely be seen in the near future. However, he does not predict a $4-per-gallon average unless an international incident takes place, such as Iran successfully blocking the Strait of Hormuz -- something it has threatened to do recently.
Petrowski added that consumers' wallets are not "stressed" with a $3.20 average gas price per gallon, nor will they be when the average reaches $3.50, as he predicts. "You have to get to the $3.80s before we start to see that usual pullback that we see at the pump," he told CNBC host Joe Kernan.
The only reason why gas prices are not higher today is an "abundance of natural gas," according to the Gulf Oil CEO. "I think a lot of people in our industry are investing in ways to start letting natural gas become a transport fuel. That will be the story in 2012 that will start to bubble to the surface. Hopefully, we can diversify away from petroleum as the only transport fuel."
For more on natural gas as a transport fuel, read CSNews Online's exclusive story, "CNG: The Fuel Alternative of the Future?" by clicking here.