Gasoline prices reach record high in survey

Regular unleaded hits national average of $1.738

March 24, 2004|By KNIGHT RIDDER/TRIBUNE

Gasoline prices reached record highs in the United States yesterday and could rise further as the fuel-guzzling summer season approaches, the AAA said.

The nation's largest motorist group said the average price nationwide was $1.738 per gallon for regular unleaded, a tenth of a cent higher than the previous record, set in September.

A separate survey by the Department of Energy came up with a higher average price Monday, $1.838 cents a gallon for all formulations of unleaded gasoline. But that is not a record in the department's survey; its high was $1.868, also in September.

The AAA, which has been monitoring gasoline prices since the fuel shortages of the 1970s, surveys prices daily at 60,000 stations using credit-card receipts.

In California, Hawaii and Nevada prices for regular unleaded have topped $2 a gallon, the AAA said. The average yesterday was $2.14 in California, $2.11 in Hawaii and $2.06 in Nevada.

Several factors have put pressure on crude oil and gasoline prices, including lower production by the Organization of the Petroleum Exporting Countries, low gasoline stocks in United States, a strong economy that has led to higher gasoline consumption and a seasonal transition at refineries, experts said.

The federal government has warned that gasoline prices could increase 30 cents to 40 cents a gallon more this summer because of new formulation requirements, said Rayola Dougher, senior policy analyst with the American Petroleum Institute.

"We certainly are troubled by gas prices, because this is putting a strain on families' budgets," said Colleen Healey, spokeswoman for AAA Mid-Atlantic, the regional branch of the national organization.

Political and economic forces threaten gasoline prices as summer approaches, including instability in Venezuela, one of the largest suppliers of crude oil to the United States, Healey said.

Higher gasoline prices could alter summer vacation plans, leading people to cancel cross-country driving trips or take mass transportation to get around.

Economists say higher crude prices threaten to slow down the nation's economic recovery, which is struggling with weak job growth.

Richard J. DeKaser, chief economist with National City Corp., a large Cleveland bank, said higher gasoline prices could reduce consumers' spending on other goods and services if they continue.

But he added that the high oil prices "were not anticipated, and I do not think they will persist."

Crude oil for May delivery closed yesterday at $37.45 per barrel on the New York Mercantile Exchange, up 40 cents, putting it near its highest level in 14 years.

Even though people are grousing about high prices, the current price of gasoline is significantly lower than the inflation-adjusted peak of $2.77 a gallon for 1981, according to the American Petroleum Institute.

Geoff Sundstrom, a AAA spokesman in Florida, said, "Economists may find it helpful to discuss inflation adjustment, but a big increase in the monthly gasoline bill is a large burden to this country's families and businesses regardless."

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