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$5 a gallon gas?

AAA Mid-Atlantic members believe that gas prices will shoot up to $5 a gallon sometime this year. (Continue reading for my prediction.)

Did you hear that sound? That was the sound of millions of drivers groaning.

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In a recent AAA Mid-Atlantic member survey, seven in 10 members said they have had to cut spending from other parts of their household budget to make up for the continued spike in gas prices.

Those who are reallocating household funds to pay for increased gas costs are spending fewer dollars on entertainment (87%) and personal shopping (81%) – such as for new home technology or work clothes. Leisure travel (62%) and home improvements (43%) took the next biggest hits as households move money around to pay for gas. Those surveyed were allowed to choose all that applied among six common household budget areas. More than four in 10 (41%) said they had cut back on food shopping.

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Was was most disturbing, though, is that many expect gas prices to climb even higher with nearly 90 percent of those surveyed believing that the Mid-Atlantic region will see $5 a gallon gas prices this year.

Nearly half of those who completed the survey (48%) believe it is very likely they will pay $5 per gallon for self-serve regular this year, while almost four in 10 (39%) believe it is likely.

Many Maryland areas are already averaging $4 or more for a gallon of gas for over a month. Today the state average is $4.05 per gallon for self-serve regular and has been holding steady at that price for the past 10 days, AAA says.

I'm a pessimist so I'm going to agree that it's likely we'll hit $5 a gallon this year. I have no data to back up my guess. Just pulled it out of thin air. But if you've got some good reasoning, I want to hear it. What say you? What's your prediction? Will it go higher than $5 or will we hover in the mid-$4 range? Or are you one of those silly optimists who thinks that we'll drop below $4.


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