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Low supply could keep gas prices up for the foreseeable future

Gas prices at a Peoria gas station sit at $5.29 a gallon.
Gas prices at a Peoria gas station sit at $5.29 a gallon.(25 News / Heart of Illinois ABC)
Published: Jun. 7, 2022 at 6:43 PM CDT
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PEORIA (Heart of Illinois ABC) - Gas prices continue to rise in across the country, with no signs of stopping.

“There’s COVID. There’s Ukraine. There’s all of these economic factors that compound on one another and that’s what we’re are experiencing,” Peoria-Area Chamber of Commerce President Joshua Gunn said.

Prices rose $0.36 in Peoria in the last week alone, according to GasBuddy.

Bradley University Economics Professor Colin Corbett says along with the short-term reasons for the rise, the oil market is slowly shrinking long-term as renewable energy and electric cars become more popular. That makes it less likely for supply to catch up with current demand, now fully rebounding from the pandemic.

“Oil companies are saying there’s not much reason for us to make physical investments in increasing capacity because we don’t think they’re going to pay off that long,” Corbett said.

Once unfathomable to many, the average price in Illinois is now well over $5 a gallon, sitting at $5.17. Even the nationwide average is approaching $5 a gallon. It’s left everyone from local businesses to consumers confused.

“It’s certainly going to impact the bottom line of a lot of our companies, and it’s going to hurt the bottom lines of our families,” Peoria Economic Development Council CEO Chris Setti said.

As for how long we could continue to see the increases, Corbett says the end isn’t in sight just yet.

“We know gas prices shoot up quickly and go down slowly,” Corbett said. “So even if suppliers decided to respond by increasing capacity, it would take a while for gas prices to start dropping again.”

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