February 28th, 2012

Ali Velshi on gas price hike: rising cost of oil and speculators

As part of CNN’s In Depth series, Chief Business Correspondent Ali Velshi explains that gas is spiking because of the rising cost of oil and continued buying by speculators.

On rising oil prices, Velshi says, “The price of oil selling at $108.56 yesterday. Now four months — five months ago, the beginning of October, oil was 80 bucks a gallon. $79.20 exactly. This week $108.56. That’s an increase of 40 percent. Now go back to October 1st. Gasoline was $3.40 a gallon. It’s now $3.70 a gallon, roughly that’s an increase of 10 percent. If gas had done what oil had done, and most of the price of a gallon of gasoline comes from the oil that goes into it, that’s the most expensive part, gas would be at $4 — when I do the calculations, $4.76 right now.”

Velshi adds, “Anybody who says they have a short-term solution to gas just lying to you.”

Starting Point with Soledad O’Brien airs week morning from 7-9am ET on CNN.