Gas Prices Show US Could Be Near Recession: Petrowski
High gas prices suggest the U.S. is close to a recession, Joe Petrowski told CNBC.
"Energy prices as they approach 17 percent of (gross domestic product) is a wall," the CEO of Cumberland Gulf Group, said Wednesday. "Not only do we have high gasoline prices, whether it’s $4 or $4.10 [a gallon], there’s no question for the growing economy it would be better to have energy prices 12 percent to 13 percent of GDP."
He added, "If you get to 17 [percent] you almost always have a recession. By the way we’re at 15 percent today."
Petrowski said sales at the company's 600 stores have been lower, with the consumer buying an average 9.1 gallons per transaction.
"From the distillate and gasoline demand, I’d say [economic] growth is tepid at best. We saw that when went into the $3.80s, $3.90s [a gallon] on gasoline," he said.
Petrowski said the price of gas has slowly been coming down, to about an average of $3.70 on the East Coast "and I think we’ll go 10 cents lower. I don’t think we’ll go much lower than that."
A reading Wednesday on producer prices showed gasoline prices fell 2.8 percent in July.