April 13, 2011 in Business

Gas prices to stay high over summer

Ruth Mantell MarketWatch
 

WASHINGTON — Gas prices will jump 40 percent for the summer driving season compared to 2010, according to a federal projection released Tuesday.

Retail prices for a gallon of regular-grade gasoline will average $3.86 from April through September, up from $2.76 for the comparable period last year, said the Energy Information Administration, the statistics arm of the Energy Department.

And in some areas, monthly average prices could be greater than the national average by at least 25 cents a gallon.

“The continuing economic recovery tends to boost gasoline and diesel fuel consumption, while the effect of higher retail prices tends to dampen it,” according to EIA. “These counter-balancing forces are expected to be prominent features of the summer driving season.”

The average U.S. household’s vehicle fueling costs will be about $825 greater this year than last year, hitting $3,360 in 2011, according to EIA.

The government also expects refiner acquisition costs of crude oil to average $112.50 a barrel this summer, up about 50 percent from $74.70 in the prior year.

Meanwhile, wholesale gasoline margins — the difference between the wholesale price of gas and the refiner acquisition cost of crude — are forecast to average 53 cents a gallon this summer, up 47 percent from 36 cents last year.

The catalyst for the increase, according to EIA, will be “continuing strength in worldwide liquid fuels consumption.”


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