Gasoline prices dip 6 cents to $2.24/gallon

NEW YORK (Reuters) – The average retail price of a gallon
of gasoline in the United States fell over the past two weeks
due to a temporary surplus as refiners built up stocks in
anticipation of the usual spring surge in demand, according to
an industry analyst.

The national average for self-serve, regular unleaded
gasoline was $2.24 per gallon on February 24, a decline of 6.2
cents per gallon from two weeks earlier, according to the
nationwide Lundberg survey of about 7,000 gas stations.

That is about 34 cents a gallon higher for self-serve,
regular unleaded than a year ago. On February 18, 2005, the
average was about $1.90 per gallon.

Despite the decline at the pumps in recent weeks, survey
editor Trilby Lundberg cautioned that prices would likely rise
substantially.

“A dramatic price surge is a strong possibility for this
spring and summer even without higher crude oil prices,”
Lundberg warned.

She cited several reasons for an expected surge in gasoline
prices, including new regulations this year calling for more
expensive ethanol to replace a cheaper additive, and the need
for more refining capacity to go off-line for pre-summer
maintenance.

“Supply will tighten and costs will rise right when we need
more supply,” Lundberg said.

She added that concern in the market over potential
international treats to the oil supply in nations such as Iran,
Iraq and Nigeria could keep crude oil prices high.

“If crude does not correct downward, then that’s the
equivalent of another 5 cents per gallon rise,” Lundberg said.

At $2.59 a gallon, Honolulu, Hawaii, had the nation’s
highest average price for self-serve, regular unleaded gas,
according to the February 24, survey.

Portland, Oregon, had the survey’s lowest price, dipping
below the $2 per-gallon barrier to $1.99.