June 27, 2005

US gasoline prices up again, nearing record high

By Christopher Doering

WASHINGTON (Reuters) - U.S. motorists should prepare to paymore at the pump over the Fourth of July holiday, after agovernment survey on Monday showed gasoline prices rose for thefourth straight week, nearing an all-time high set April.

The national average pump price for regular unleadedgasoline rose 5.4 cents to $2.215 a gallon, up 29.4 cents froma year ago, according to the latest weekly survey of more than800 service stations by the Energy Information Administration(EIA).

Gasoline prices are now 6 cents below a record high of$2.28 a gallon set on April 11. Still, when adjusted forinflation, the most expensive price at the pump was $3.08 agallon in March 1981.

"We're not going to see prices below $2 this summer," saidNeil Gamson, an EIA economist.

Gamson said it was unlikely prices would fall given thecurrent price of crude oil. "If (crude oil) stays at theselevels that will be passed to consumers at the pump."

U.S. truckers saw retail diesel prices rise 2.3 cents to arecord average $2.336 per gallon last week, EIA said. Theaverage cost for a gallon of diesel is 63.6 cents per gallonhigher than it was one year ago.

More than 40 million people are expected to hit U.S.highways for the Fourth of July weekend, the highest number ofmotorists for any holiday in U.S. history, according to AAA.

Mantill Williams, a AAA spokesman, said gasoline pricesalone will not deter people from traveling.

"You do have to plan for (high gas prices), to budget forthat but it's not going be a deal breaker to stop you fromgoing on your trip," Williams said.

The recent surge in gasoline prices has mirrored the jumpin the cost of crude oil, which accounts for about half thetotal for making gasoline.

U.S. crude futures hit a new record on Monday as concernsmounted that stretched production and refinery capacity will beunable to keep up with torrid global demand.

Crude for August delivery settled 70 cents, or 1.2 percenthigher, at $60.54 a barrel on the New York Mercantile Exchange,after hitting a record $60.95 earlier. NYMEX prompt crudeprices have risen more than $23 a barrel or 61 percent from ayear ago.

The government's weekly retail gasoline report showed theaverage U.S. pump price was highest on the West Coast afterrising 5.3 cents to an average of $2.373 per gallon.

The Gulf Coast region had the cheapest gasoline, increasing3.7 cents to $2.115 a gallon during the last week, EIA said.

Among the 10 major urban areas highlighted by EIA, Houstonpump prices were the cheapest at $2.069 per gallon, up 3.1cents. The most expensive city was San Francisco where pricesrose 8.4 cents to $2.449.

The national price for cleaner-burning reformulatedgasoline, sold at about one-third of the stations in cities andsmoggier areas, rose 4.6 cents to $2.278 a gallon.

Truckers in the West Coast paid the most for diesel asprices rose 4.2 cents to $2.433 a gallon. The Gulf Coast andthe Rocky Mountain regions posted the cheapest diesel prices at$2.288 a gallon, up 1.4 cents and 5.2 cents respectively .