By Carleen Casey
The United States recently overcame a rough couple of weeks due to a monstrous hurricane, known as Hurricane Harvey. Texas was the most affected state in the country, while Boise, Idaho was safe from any tragic situations.
Harvey’s reach may be a bit wider than the southern states, however. Boise will increase its gas prices by 80 cents due to the hurricane. When prices will decrease is uncertain–students should be prepared to spend a little more than normal when filling up their tanks.
According to Allen Dalton, adjunct faculty member and economics professor at Boise State, prices have increased for one reason: oil.
“Oil prices are basically determined in one market and that’s the world market,” Dalton said. “If there’s a reduction in supply anywhere in the world, that’s going to have consequences everywhere.”
Dalton believes supply and demand are a big factor right now because if Hurricane Harvey is affecting one state, then the states around it will be affected too. Since August, eight different oil refineries were shut down due to the Hurricane.
“When they’re back online, prices will go back down. There will be greater supply in the world market,” Dalton said. “Prices have to rise when you have scarcity because it sends important signals, including Idahoans to conserve on a scarcer resource.”
Don Holley, emeritus faculty, also believes supply and demand are playing a role in rising gas prices.
“The amount people are willing to sell is equal to the amount people are willing to buy,” Holley said. “They are not going to produce more that they can sell, they’re not going to produce less that they can sell–they produce exactly what they can sell. Then you have a hurricane like Harvey, all of a sudden productive capacity is destroyed, the supply curve shifts and then the price rises.”
According to Holley, Hurricane Irma will not affect gas prices as much as its predecessor, Hurricane Harvey. This is because Boise gets its oil from companies that are closer to Texas, instead of Florida. Holley then finished his statement about whether Hurricane Irma would affect the price increase just as much. He said, “Not like Harvey.”
Dalton believes refineries and platforms will get back up to capacity soon if Irma heads to the east coast instead down towards Florida. His estimated time for that is a month, maybe even two months.
“We have a problem with Hurricane Irma now–if Irma goes through the gulf, then those refineries are going to be shut down for a much longer period of time,” Dalton said.“It depends upon what happens with Irma, how soon and to what extent prices will change.”
Some students are upset by the fact that gas prices are increasing. For Kira Acevedo, Boise State alumna, rising gas prices mean less money for other necessities.
“It makes sense as to why it’s expensive,” Acevedo said. “I’m broke all the time and I don’t have money to put towards more gas. I have a budget for my gas and when I have to put more money down, that means it takes away from other expenses.”