Posted on 03/10/2008 1:30:49 AM PDT by familyop
NEW YORK (Reuters) - U.S. average retail gasoline prices have reached a new high of almost $3.20 per gallon and will likely jump another 20 to 30 cents in the next month, worsening the pain of consumers struggling to make ends meet in an economic downturn.
Gasoline prices are rising sharply as refiners, who have kept prices down in order to compete for sales, become more willing to pass on their higher costs of crude oil, according to an industry analyst on Sunday.
The national average for self-serve regular unleaded gas was nearly $3.20 a gallon on March 7, up about 9.44 cents per gallon in the past two weeks, according to the nationwide Lundberg survey of about 7,000 gas stations. The price has risen 64 cents per gallon in the past 12 months.
"The price increase was entirely due to the higher costs of crude oil," said survey editor Trilby Lundberg.
Although the latest price represents a nominal all-time high, when adjusted for inflation it is a smidgen below the record of $3.18 per gallon reached on May 18, 2007, Lundberg said.
Lundberg said things will likely get worse, with prices at the pump rising 20 to 30 cents per gallon in the next month as refiners begin passing on to customers more of their higher costs for crude oil.
"Should prices indeed rise 20 to 30 cents, they would vastly exceed previous prices on an inflation-adjusted basis," Lundberg said.
Refiners since last spring have deliberately refrained from passing on their higher costs for crude oil, in order to compete for sales, she said.
"But refiner profit margins have become so slim that they will now raise prices to recover their lost margins," said Lundberg. Likewise, she said retailers will also be less willing to hold back from passing on their higher costs to drivers.
Moreover, prices will also rise because of the return to daylight savings time and the approach of warmer weather, Lundberg said.
"Spring demand growth will soak up the current surplus of U.S. gasoline and put more pressure on prices," Lundberg said.
At $3.58 a gallon, the San Francisco Bay Area had the highest latest average price for self-serve regular unleaded gas on March 7, while the lowest price was $2.95 in Cheyenne, Wyoming.
The average U.S. diesel price was $3.80 a gallon in the latest survey, up 22 cents a gallon from two weeks ago, and $1.02 higher than this time last year.
(Reporting by Ransdell Pierson, editing by Richard Chang)
With a drop in demand, more gasoline/oil is available to be sold to other countries willing to pay the high prices.
What is needed is to increase domestic oil production and put tariffs on the export of domestic oil and its products to other countries. Alaska oil and off shore oil is right here. We need to drill every barrel we can find.
And we need to do it NOW, before Iran goes Nuclear and causes the Mid-East & Venezuela to shut the spigot off.
Unless, of course, the high prices cause a drop in demand from other countries too. And they will. The price of oil is not as inelastic as is fondly thought by producers.
I discovered something interesting — I’m usually not saving any money buying gas at Costco. The turnover of gas at their stations is so rapid that their prices always reflect the latest increase. So it’s often been cheaper (or no different) to get gas down the road, where they are still selling gas that had been delivered earlier (and is priced accordingly).
Besides everything listed in the article, gasoline will be more expensive over the next 2 months because refineries must do the change-over to summer formulations.
This is finally starting to make me very angry. The dollar’s slide is pushing crude and gold and a lot of the commodities across the spectrum to highs. We need to change the supply equation. We need to get Bernanke out of the helicopter.
We’re planting energy in the ground when we should be digging for it. We are exposing food further to energy volatility when transportation costs were already well represented in the price.
Is George Soros and gang doing anything to contribute to this misery?
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