Gas Prices Expected to Hit Record High

WASHINGTON – U.S. retail gasoline prices are likely to hit a record high of about $1.83 per gallon this spring due to tight global supplies, then decline a little in the summer driving months, the government said March 9.

“There is a high likelihood of additional gasoline price increases this spring,” the U.S. Energy Information Administration (EIA) said in its monthly supply and demand report.

The agency, which is the statistical arm of the Energy Department, predicted the nationwide monthly average pump price would peak at about $1.83 per gallon this spring, then average about $1.74 per gallon throughout the summer months.

“This would be a record in nominal dollar terms and the highest inflation-adjusted summer average since 1985,” the EIA said.

Gasoline prices could soar even higher if there are unexpected problems with a major U.S. oil refinery or pipeline, the agency said. Prices have marched steadily higher in recent weeks due to tight global supplies of crude oil, the price of which accounts for nearly half of the cost of gasoline.

In its weekly retail gasoline report issued March 8, the EIA said the average nationwide price jumped by 2.1 cents to $1.738 per gallon. That is less than a penny lower from the all-time high of $1.747 per gallon reached last August 25 for regular unleaded gasoline sold throughout the nation.

The EIA’s weekly report is based on the agency’s survey of about 800 service stations.

Gasoline prices could become an issue in this year’s presidential campaign, as rising costs reduce consumers’ spending power and boost business costs.
Some members of Congress have asked the Federal Trade Commission to investigate whether big oil companies are trying to manipulate markets and push up prices.

Source: Reuters