From: Reuters
Published April 20, 2008 07:08 PM

Drivers paying record pump prices

By Chelsea Emery

NEW YORK (Reuters) - U.S. drivers are paying record prices to fill their gas tanks and they could see prices surge as much as 30 cents more per gallon over the next few weeks, according to an industry analyst.

U.S. average retail gasoline prices hit a record $3.4737 per gallon on April 18, up 15.66 cents from the April 4 average, according to the nationwide Lundberg survey of about 7,000 gas stations.

Higher driving costs come at a tough time for U.S. consumers, who are already struggling with higher food prices, a slowing economy, job losses and sinking home prices. In addition, surges in gasoline demand during the peak driving months of June, July and August and higher costs could force motorists to cut back on their vacation travel plans, or reduce spending in other areas.

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"Behind the record-high pump prices are other record highs that are less visible to the naked eye of the motorist, including record high crude oil prices and a record number of regulations that are adding costs to refining," said survey editor Trilby Lundberg.

The WTI crude oil futures price closed at $116.69 per barrel on April 18, up from $106.23 on April 4, she said.

Boosting gas prices still more, regulatory mandates are calling for increasing levels of ethanol to be added to gasoline. That's raising expenses for refiners. In addition, the costs of spring reformulations of gasoline will also hurt prices at the pump.

Refiners and retailers have not yet fully passed on their higher costs to consumers, Lundberg said. When they do, prices will shoot higher.

"If crude oil prices do not retreat, then we will see somewhere between 10 cents to 30 cents rise in the retail price of gasoline, probably in the next few weeks," Lundberg said.

So far this year, the price of gasoline has climbed 53.47 cents per gallon, Lundberg said.

CALIFORNIANS, TRUCKERS HURT

Californians are paying the most for their gas, with average prices in San Francisco reaching $3.88 per gallon. Some gas stations are charging as much as $4 per gallon, Lundberg said.

California is the biggest state consumer of gasoline.

Trucking companies, too, are paying more for their fuel. That could boost prices for a range of goods that are transported, including produce and consumer products.

The average U.S. retail diesel fuel price on the 18th of April hit $4.2134 per gallon, up 15.13 cents.

The lowest average gasoline price was $3.21 a gallon in Newark, New Jersey. Taxes account for most of the disparity in prices between California and New Jersey. Taxes in Newark add about 33 cents per gallon to the cost of gas, while in San Francisco, motorists pay about 68 cents per gallon toward taxes.

(Reporting by Chelsea Emery; Editing by Jan Paschal)

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