Last week, gas prices in central Indiana averaged around $4.24 a gallon and when compared to the week of Oct. 31 prices soared an average of 45 cents a gallon, according to WTHR.
According to the American Automobile Association, as of Nov. 13, the current average price of gas per gallon in Indiana, which is currently $4.05, is 28 cents higher than the national average. Particularly, the central region of Indiana is seeing the highest average price within the whole state, according to AAA.
Head of Petroleum Analysis for the gas price tracking database GasBuddy Patrick De Hann said that the Great Lakes region price jumps are a result of tight supply, according to the company’s website.
“Just over half of the nation’s 50 states saw gasoline prices rise last week, pulling the national average back up for the time being due to big jumps in the Great Lakes [states],” said De Hann. “For now, the rise in the Great Lakes, brought on by tight supply, has already started to ease, and declines should start again.”
University of Indianapolis Assistant Professor for the School of Business Mark Akers said that the main reason for tight oil supply is a consequence of the war in Ukraine.
“A lot of it’s being driven by the war in Ukraine and some of the Middle Eastern countries cutting the US off and us having to send some military [efforts] over there as well to support the Ukrainians,” Akers said. “So that’s all taking [factors] out of the economy that would be there normally.”
According to Akers, expectations of tightened oil supply are also driving the high prices in oil resulting in the inflation of gasoline prices.
“Some of it is raising the prices and changing the availability of certain kinds of goods and services because [sellers] expect things to happen,” Akers said. “Companies don’t react as much as they try to proact. If they see things coming up down the road, they’ll try to react before it happens.”
Akers said frequent gas price fluctuations over the past week do not have to do with supply and demand. Instead, it has to do with expectations from Wall Street and the International Monetary Fund. According to both Investopedia and the IMF, Wall Street is the headquarters for investment banks, brokerages and the stock exchange, while the IMF is in charge of encouraging international trade and economic growth.
UIndy freshman nursing major Stephanie De Jesus-Cardoso said that the price fluctuations are making gas unaffordable and unreliable.
“It’s making it unaffordable and you have to cut down on other things to pay for maybe two gallons of gas and that barely gets you anywhere,” De Jesus-Cardoso said.
According to a case study from Colby College, many non-market forces that play a role in gasoline prices, it can be hard to predict future prices. Akers said that it is best to assume prices will stay relatively the same for the near future.
“It’s going to be roughly the same. It’s not going to go wild. It’s not going to go up to $50 a gallon or anything like that,” Akers said.
De Jesus-Cardoso said she has to limit driving in order to deal with the high prices of gas.
“[I’m] making sure I only drive to places that I need to drive to and making sure I spend my money wisely,” De Jesus-Cardoso said.
According to Akers, the market for gas is a complex system with many factors that make it unpredictable, but it is not an unreasonable market. According to AAA, the collective average of Indiana gas prices have had a steady decrease from one month ago from an average of $4.14 per gallon to an average of $4.05 on Nov. 13.
“I’ve learned over the years that the economy, the financial markets and all the things that make the economy work and give us things like universities are so complex,” Akers said. “The activity in it can be changed because of the way we think and expect things to happen. That’s based on our personality and the world we are living in… even the smallest thing can make a change.”