Rapid City economist predicts gas to stay expensive, oil crisis to taper off

Published: Mar. 7, 2022 at 6:20 PM MST
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RAPID CITY, S.D. (KEVN) - Half a century ago, a major oil crisis brought the price of gas to just over a dollar. It may not sound like much, but that’s triple what it was at the time.

But on Monday, average price of gas reached $4 per gallon nationwide - the highest its been since 2008.

So, will the pain at the pump stick? Don Frankenfeld, a local economist, predicts it will.

He compares this latest oil spike to the 1973 gas crisis, when Saudi Arabia and other oil-rich countries collectively restricted petroleum exports.

Frankenfeld says the 1970s are a good reflection of what Americans are feeling now and can expect in the future.

“Gasoline prices skyrocketed in the United States,” Frankenfeld says. “Eventually, the crisis abated. It didn’t go away entirely. Gas prices remained high ... and long-term? It’s awfully hard to say, but, probably, expensive gasoline is gonna be with us in one form or another for years.”

He adds this would be especially hard on South Dakotans, who are more reliant on personal transportation: “It affects an economy like South Dakota way more than an economy like New York City or other places where there’s mass transit or other alternatives to using gas-powered vehicles.”

The price jump comes amid talks for the U.S. to ban Russian oil imports in response to the country’s ongoing conflicts with Ukraine.

Frankenfeld estimates gas could rise even more if the White House followsthrough - up an additional 50 cents to a whole dollar.

He adds there is room for optimism, saying we’re slowly making progress toward becoming self-sufficient on our own oil production.

“Today, we are close to energy-independent ... we’re not producing quite a much gasoline as we consume, but we’re close.”

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