U.S. drivers can expect retail gasoline prices to average above $2.10 a gallon on a monthly basis through 2006, while truckers will face average diesel fuel costs over $2.20, the government said Wednesday.
The federal Energy Information Administration (search) said its forecast is based on the price for U.S. crude oil staying above $55 a barrel during the same period.
The price for crude, which on Wednesday hit another record high of over $64 on the New York Mercantile Exchange (search), accounts for about half the cost of making gasoline and diesel fuel.
"It does appear that retail gasoline and diesel prices will remain abovegular unleaded gasoline hit a record $2.37 a gallon on Monday, while diesel fuel rose to $2.41 — less than half a penny from its all-time high.
Over the next few weeks, the EIA said a recent 21-cent rise in gasoline spot prices will be passed on to consumers at the retail level.
So far, only about 8 cents of that increase has made it into the pump price, the agency said.
"It takes about 2 weeks for changes in the spot price of gasoline to begin to show up at the pump and it is mostly passed through after 4 weeks," the EIA said. "This implies more price increases lie ahead for the next few weeks."
The agency said that after the Labor Day (search) holiday in early September gasoline prices often decline as fuel demand drops when people go back to school and work.
However, the EIA warned that with a government forecast of an active hurricane season this year, gasoline prices "could continue to surge" beyond Labor Day if a major storm disrupts supplies in the Gulf of Mexico (search) or more oil refinery outages occur.