Two Steps Forward, One Step Back

I’ve noticed a pattern in gasoline prices since I started driving in 1990. Prices remain steady for a while, then they go up. They remain at that higher price for a short period of time, and then fall a bit. But never back to the price from which they were increased.

To take a recent example, before Katrina hit, prices down the street were around $2.799 per gallon. After Katrina, the prices jumped to $3.499 per gallon. Yesterday they fell to $3.199 per gallon. Buyers are relieved that prices went back down, and will accept this as the new norm.

It will be.