What explains the pain at the pump? - KPLC 7 News, Lake Charles, Louisiana

What explains the pain at the pump?

By Brandon Richards - bio | email

LAKE CHARLES, La (KPLC-TV) – The price of gasoline across Southwest Louisiana has gone up nearly 20 cents this week.

And it's not just a local problem.

According to AAA, the price of gas across the nation soared six cents in just that last 24 hours.

MSU economist Dr. Michael Kurth said the rising price of gas is in line with the price of everything else.

"The price of all commodities have been going up, not just oil," said Kurth. "That's the reflection of global inflation."

Kurth said unrest in parts of the Middle East, particularly this week with Libya, also contributed to the rise.

"Egypt is not a major oil exporter. Tunisia is not a major oil exporter. Libya is an oil exporter," said Kurth.

As for claims of price gouging, Kurth said those arguments fall flat.

"The price is going to go up immediately because for gas stations, if they're selling oil or gas, they have to think about what the cost is going to be to replace that," said Kurth.

For every dollar spent at the pump, 68 cents goes to pay for crude; 17 percent goes for refining; 15 percent for taxes and the rest, usually a small percentage, goes to individual gas stations.

And economists predict things will get worse before they get better.

According to Kurth, if the price for a barrel of oil rises to $140, the cost for a gallon of gas would soar to nearly $4.

Copyright 2011 KPLC. All rights reserved.

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