Rising gasoline prices could hold down the embryonic recovery of the U.S. economy, however the effect of the price hike would be milder than that of the last year, suggest fuel experts.
As gasoline prices arrives at $3.65 a gallon on Monday, Energy Information Agency reports an 8.8 percent leap since the beginning of the year.
Mounting pressures on gasoline price hike further skyrocketed crude prices to a nine-month high at $106.72 a barrel during Wednesday trading.
Can U.S. withstand surging fuel prices?
U.S. fuel prices stability is on the rock since last year’s middle-east crisis over political reforms. To add to the woes, Japan’s quake led to disruptions in automobile production which seriously affected both the fuel prices and U.S. economic growth last year.
But this year U.S. economy is in a better condition with higher job prospects, thriving manufacturing sector and surging consumer spending, say experts. The relatively rising economy would be able to withstand the gasoline prices effectively.
Sung Won Sohn, an economics professor at California State University Channel Island said, "We don't have the Japanese tsunami to worry about, business and consumer confidence have improved, and the job market is growing nicely."
Surging fuel prices amid middle-east crisis
Rising Iranian upheavals and Obama sanctions on fuel imports from the Islamic nation is the biggest fuel threat looming on the U.S. and leading major world economies.
Iran is fifth largest oil exporter in the world and trade cuts from the nation would have adverse effects on the major economies worldwide, fear experts. In a recent response to the U.S. sanctions, Tehran has warned to shutdown Strait of Hormuz, connecting the Persian Gulf and the Gulf of Oman.
Meanwhile, Iranian leaders are adamant that their nuclear program is aiming at peaceful purposes and not towards creating nuclear weapons.
At the moment, statistics shows a 41 percent increase in the gasoline prices as compared to last year.
Rising fuel prices could hurt United State's economic recover.
Can US withstand the surging fuel prices amidst Middle-East crisis?