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Local analysts aren’t surprised that demand for gasoline is down.

And while that trend may continue — even with the summer driving season gearing up — that doesn’t necessarily mean that gas prices won’t climb to record-shattering levels.

But Steve Agee, an economist with Oklahoma City University who also is president and chief operating officer of Agee Energy and chairman of the Oklahoma Energy Resources Board, is not making predictions on how high prices will go.

“If you could tell me where crude oil prices are going, I could make you a prediction. But at the margin…ultimately demand factors are going to decide this issue,” he says.
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The federal government has refused to rule out the possibility its proposed emissions trading scheme will force up petrol prices.

The government will offer a glimpse of the much-awaited scheme to battle climate change when it releases a green paper in July.

A timetable, released this week, said by the end of the year the government would give a “firm indication” of the scheme’s trajectory, which would determine the initial price of carbon.

Climate Change Minister Penny Wong reaffirmed the scheme - the centrepiece of efforts to curb greenhouse gases - would begin in 2010.

Asked on Tuesday whether the scheme would force up petrol prices, Senator Wong refused to rule it out.

“Absolutely we know from the Stern report and a from a range of other advisers, including Professor Garnaut, that the cost of neglecting to act to the Australian economy and to households will be significantly greater than … the cost of responsible action now,” Senator Wong said.

The Australian people recognise the scheme would not be painless, she said.

But the government would be “methodical and careful” to ensure the impact was minimised.

Source: The Age