WASHINGTON – U.S. motorists could soon find some relief at the pumps as record gasoline prices may decline once more refineries come back online to make motor fuel and gasoline imports increase, the government's top energy forecaster told Congress on Tuesday.
The national average pump price hit a record $3.10 per gallon this week due to strong gasoline demand and lower fuel inventories from the shutdown of refineries as well as less-than-normal imports, according to the U.S. Energy Information Administration.
"With refinery production expected to improve during the rest of May and import volumes increasing over the last few weeks, gasoline markets may ease somewhat, causing gasoline prices to recede from their current high levels," EIA head Guy Caruso told a Senate Energy and Natural Resources Committee hearing on summer gasoline prices.
However, Caruso warned lawmakers that the EIA expected "gasoline markets to remain fairly tight this summer."
EIA is the independent forecasting and analytical arm of the U.S. Energy Department.
The AAA motorist group told lawmakers it was concerned about the number and frequency of refinery outages this year "in light of the large profits the industry has been reporting."
AAA spokesman Geoff Sundstrom said it was "troubling" that the United States is not able to supply enough gasoline to meet domestic demand.
"Americans should be able to expect that those who refine oil into gasoline do a better job of anticipating demand growth, plan to meet that growth, and then make the necessary investments in plants, equipment and labor to provide the fuel at a cost that has some semblance of stability," Sundstrom said.
Oil companies are expanding their refineries, but a new refinery has not been built since the 1970s. The industry cites community opposition to new refineries and government regulations that make it too costly and difficult to construct facilities.
High gasoline prices are pinching the pocketbooks of Americans.
"When gas prices increase, there is less money to spend on other things," said Sundstrom. "The extra expense results in a sacrifice elsewhere in a family's budget — groceries, healthcare, college saving, retirement planning."
Sen. Jeff Bingaman, the Democrat who chairs the energy panel, acknowledged: "The U.S. economy remains vulnerable to oil and gasoline supply disruptions and associated price increases."
The top Republican on the committee, Sen. Pete Domenici, said there was no "silver bullet" that would bring down rising gasoline prices this summer.
The solution for the long term, he said, is to increase drilling access to America's oil reserves and develop alternative fuels to reduce U.S. gasoline consumption.