Gas Prices Up, Likely to Go Higher: State Average Closing in on All-Time Mark

By Tony Natale, The Tribune, Mesa, Ariz.

Feb. 28–Gasoline prices nationally and in the Valley are gradually approaching all-time highs mainly because of increasing crude oil prices, and they don’t appear headed down anytime soon, according to market watchers.

The price of a gallon of regular unleaded gasoline reached a statewide average of $3.04 Wednesday, an 11-cent increase from a week ago, said Linda Gorman, AAA Arizona public affairs manager.

In the East Valley, prices increased from $2.86 last week to $2.96. Some stations increased as much as 20 cents in the week.

In Scottsdale, the price went from $2.94 last week to $3.02 on Wednesday.

The all-time high price for a gallon of regular gasoline in the East Valley was $3.14, reached on Sept. 9, 2005.

In Scottsdale, it hit a record $3.19 on May 8, 2006.

“A record $4 is unlikely in our state, although the price will probably continue to climb,” Gorman said.

“Despite the recent price jumps, Arizonans are currently paying less for fuel than 48 other states. But this is not likely to last much longer.”

Meanwhile, at $3.04 a gallon, the state average gasoline price is 9 cents from an all-time high of $3.13 a gallon reached in September 2005, after Hurricane Katrina, Gorman said.

The all-time national average high reached $3.23 on May 24, 2007.

“Until the oil prices lower, it looks like the price of gasoline in the near future is going to be a bleak situation,” Gorman said.

Crude oil prices, meanwhile, are flirting with record highs.

Fred Rozell, pricing director for the Oil Price Information Service, predicts gas prices will continue to climb, but he doesn’t place all of the blame on rising oil prices.

“At this time of year, fuel pump prices generally go up all over the country,” said Rozell. “Yes, crude oil prices are rising, but the higher gasoline prices are also because refineries are switching blends for summer.”

Rozell said the combination of rising oil prices, plus the annual refinery switch to cleaner-burning fuels, traditionally results in what he describes as “petrolneurosis,” or a spreading fear that prices will go beyond control.

“It happens almost every year about this time,” said Rozell.

“And, I’m predicting that pump prices in some parts of the country could reach or break $4 a gallon this summer,” Rozell said.

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