Gov't: Gas Price Nears Record High

Published June 27, 2005

| Reuters

U.S. motorists should prepare to pay more at the pump over the Fourth of July holiday, after a government survey on Monday showed gasoline prices rose for the fourth straight week, nearing an all-time high set in April.

The national average pump price for regular unleaded gasoline rose 5.4 cents to $2.215 a gallon, up 29.4 cents from a year ago, according to the latest weekly survey of more than 800 service stations by the Energy Information Administration (search) (EIA).

Gasoline prices (search) are now 6 cents below a record high of $2.28 a gallon set on April 11. Still, when adjusted for inflation, the most expensive price at the pump was $3.08 a gallon in March 1981.

"We're not going to see prices below $2 this summer," said Neil Gamson (search), an EIA economist.

Gamson said it was unlikely prices would fall given the current price of crude oil. "If [crude oil] stays at these levels that will be passed to consumers at the pump."

U.S. truckers saw retail diesel prices rise 2.3 cents to a record average $2.336 per gallon last week, EIA said. The average cost for a gallon of diesel is 63.6 cents per gallon higher than it was one year ago.

More than 40 million people are expected to hit U.S. highways for the Fourth of July weekend, the highest number of motorists for any holiday in U.S. history, according to AAA.

Mantill Williams, a AAA spokesman, said gasoline prices alone will not deter people from traveling.

"You do have to plan for (high gas prices), to budget for that but it's not going be a deal breaker to stop you from going on your trip," Williams said.

The recent surge in gasoline prices has mirrored the jump in the cost of crude oil, which accounts for about half the total for making gasoline.

U.S. crude futures hit a new record on Monday as concerns mounted that stretched production and refinery capacity will be unable to keep up with torrid global demand.

Crude for August delivery settled 70 cents, or 1.2 percent higher, at $60.54 a barrel on the New York Mercantile Exchange, after hitting a record $60.95 earlier. NYMEX prompt crude prices have risen more than $23 a barrel or 61 percent from a year ago.

The government's weekly retail gasoline report showed the average U.S. pump price was highest on the West Coast after rising 5.3 cents to an average of $2.373 per gallon.

The Gulf Coast region had the cheapest gasoline, increasing 3.7 cents to $2.115 a gallon during the last week, EIA said.

Among the 10 major urban areas highlighted by EIA, Houston pump prices were the cheapest at $2.069 per gallon, up 3.1 cents. The most expensive city was San Francisco where prices rose 8.4 cents to $2.449.

The national price for cleaner-burning reformulated gasoline, sold at about one-third of the stations in cities and smoggier areas, rose 4.6 cents to $2.278 a gallon.

Truckers in the West Coast paid the most for diesel as prices rose 4.2 cents to $2.433 a gallon. The Gulf Coast and the Rocky Mountain regions posted the cheapest diesel prices at $2.288 a gallon, up 1.4 cents and 5.2 cents respectively .

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