Indianapolis - The price of crude oil has been hovering over $80 barrel. That is up significantly from even a month ago and so gas prices have steadily been going up as well.
The state average now is $2.77 a gallon.
Economists say, global factors are playing a major role in the prices of crude oil as demand in China and the U.S. is up.
The Christmas Holiday shopping period was better than expected, so as a result, the economy is doing better. Jobs are still not in very good shape, but the growth of the economy is occurring, which leads to more demand.
Also, the weak dollar is driving up prices.
"Anytime you exit a recession, you tend to have inflation. Inflation causes a weaker currency. Weaker currency causes expensive oil and we're coming out of the recession. So it's a natural tendency, we've seen it all in history. This is not going to be any exception," said Professor Matt Will, University of Indianapolis.
Inflation and the rise in oil prices could have a negative ripple effect for US businesses, for example, plastics manufacturing and transportation costs and that could hamper economic recovery.
So, Professor Will says you may soon see the Fed push up interest rates.
Demand for heating costs is up as well, but prices don't usually go up this much until Spring and Summer, during the busy travel months and the transition to reformulated gas.
It is expected that prices will increase to at least $3 a gallon by Spring.
"Do some comparative shopping when your are driving, on your way to work, on your way home. Pay attention to what typical stations in your area charge. You'll get a feel not only for their pricing trends, but how they compare to other stations in the area," said Greg Seiter, AAA.
