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As the dollar falls, gas prices in Florida, nation are sure to rise

TAMPA — Gas prices are climbing again across the country, this time largely because of the dollar's recent drop in value.

In the past week, the national average was up 5 cents per gallon, according to AAA Auto Club South. Florida's average price rose 8 cents.

"You can't say that gasoline prices rise and fall for a single reason, but the value of the dollar is always an underlying current," said Gregg Laskoski, AAA Auto Club South spokesman.

Laskoski said investors don't trust the dollar against more secure currencies, such as the euro, the Japanese yen and the British pound.

When the dollar loses value as the government goes deeper into debt, it costs more to buy the same amount of crude oil. In addition, investors fear the possibility of higher long-term interest rates to make up that borrowed money.

As a result, investors put their money in other things, like crude oil or gold, whose values rarely fluctuate. More crude oil investments almost always push gas prices up, Laskoski said.

"We're flat as far as demand goes, and our supply is ample. There are tons of gasoline all over the place," he said. "The weak dollar is creating this bull market for commodities, and crude oil is the biggest commodity that we have."

Another factor in the increase is the required switch from winter-blend gasoline to a more expensive summer blend, which burns cleaner for the busier travel season.

Laskoski said he's unsure why the government doesn't require cleaner gasoline year-round.

Currently, the average gas price nationwide and in Florida is $2.66, up from $2.61 nationally a week ago and $2.58 in Florida. A year ago, the national average was $4.07 and Florida's average was $4.03.

Gas prices this year will probably peak at about $2.80 or $2.90 a gallon, Laskoski said.

Gas prices increase

The average cost of a gallon of gasoline, according to the AAA:

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As the dollar falls, gas prices in Florida, nation are sure to rise 06/15/09 [Last modified: Monday, June 15, 2009 8:41pm]
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