WATCH: Forecaster sees no relief from high gas prices

Motorists can expect to continue paying high gasoline prices through the summer, the state’s leading economic prognosticator said Wednesday.

Michael Pakko, the Arkansas Economic Development Institute’s chief economist and state economic forecaster, told Hot Springs National Park Rotary Club members crude oil inventories have tightened just as the summer driving season approaches.

The average price for regular unleaded in Hot Springs Wednesday was $3.95 a gallon, according to AAA, about 4 cents lower than the city’s record price from September 2008 and 45 cents lower than Wednesday’s national average.

High prices do little to dampen demand, Pakko said, explaining that price fluctuations have minimal influence on consumption. Because demand isn’t responsive to supply, high fuel prices act as a tax on household budgets, he said.

Arkansans feel the pain more acutely than most, spending on average a larger share of their incomes on gasoline than residents of other states. Pakko said while low excise taxes relative to other states keeps Arkansas’ average gasoline prices in the lowest quintile of the nation, it’s the state’s only spending category that when weighed as a percent of household budgets exceeds the national average.

See the full article from The Sentinel-Record here.