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AAA reports record gas prices

| Wednesday, March 24, 2004

WASHINGTON -- The retail price of gasoline hit an all-time high Tuesday -- nearly $1.74 per gallon nationwide -- reflecting strong demand, tight supplies and the high cost of oil, AAA reported.

AAA, formerly the American Automobile Association, reported that motorists are now paying $1.738 per gallon for self-serve regular unleaded gasoline, one-tenth of a penny higher than the previous record set Aug. 30 of last year. Premium unleaded costs more than $2 a gallon in many parts of the country.

"Unstable gasoline prices make budgeting for fuel costs extremely difficult for families and businesses," AAA said in a statement.

The Orlando, Fla.-based travel agency gets its data from Oil Price Information Service of Lakewood, N.J., which collects retail price information from 60,000 locations daily.

In Western Pennsylvania, prices were somewhat lower but increased by a little more than 2 cents a gallon this week, according to AAA East Central in Pittsburgh. Its AAA Fuel Gauge Report showed that the average price paid for a gallon of regular, unleaded self-serve gasoline this week was $1.705, up 2.3 cents from $1.682 last week. It said the current average price matches the record high for the region set on Sept. 2 last year. One year ago, the price for the same fuel was $1.61 cents a gallon.

AAA East Central said average prices in the region included Beaver, $1.717; Butler, $1.715; Greensburg, $1.699; Indiana, $1.699; Jeannette, $1.689; Kittanning, $1.706; Latrobe, $1.695; New Kensington, $1.703; Pittsburgh, $1.707; Uniontown, $1.699; and Washington, $1.714.

Gasoline prices traditionally rise between March and May as refiners temporarily shut down their plants in preparation for the peak summer driving season, when special clean-burning blends of fuel are required. These shutdowns shrink supplies.

This year, the effect on price has been magnified because commercial inventories of gasoline already are low. For the week ended March 12, U.S. gasoline inventories stood at 199.6 million barrels, down from 202.1 million barrels a year ago.

The most recent statistics from the Department of Energy show that gasoline demand has been roughly 4.5 percent higher than last year over the past four weeks, at 8.9 million barrels a day. Moreover, refiners are maintaining extremely lean inventories these days because of the high price of crude oil, another factor contributing to higher fuel prices.

Crude oil for May delivery sold for $37.45 per barrel yesterday on the New York Mercantile Exchange, up 40 cents. The price of oil is below recent highs but still near its highest level in 14 years.

The Energy Department's weekly survey of retail gasoline prices, released Monday, showed a jump to $1.743 in the national average for regular-grade gasoline in the week ended March 22, up from $1.724 the week before. That's still 0.4 cent below the record the agency reported last August.

The department's Energy Information Administration compiles the data weekly from a sampling of about 800 locations from a database of 115,000 stations monitored.

Meantime, some Democratic lawmakers criticized the Bush administration for contributing to the recent run-up in fuel costs by purchasing oil for the nation's Strategic Petroleum Reserve at a time when supplies are tight, driving prices even higher.

Senators Charles Schumer of New York, Barbara Boxer of California and Harry Reid of Nevada urged the Bush administration yesterday to help ease gasoline prices by releasing oil from the SPR, which is close to its 700-million-barrel capacity at 648 million barrels as of March 12.

Energy Secretary Spencer Abraham has repeatedly said the administration views the petroleum reserve as an emergency stockpile for national security and that it should not be used to manipulate prices.

The amount of oil being taken off the market "is fairly negligible" in a global oil market of 86 million barrels a day, Abraham said yesterday at a Senate hearing.

Last week, another private survey, compiled weekly by California-based analyst Trilby Lundberg, put the average price of gasoline at $1.77 per gallon -- a penny above the survey's previous record in May 2001. Lundberg surveys 8,000 gas stations.

In other Nymex trading yesterday, April gasoline futures rose 1.77 cent to 1.1468 cents a gallon and May heating oil futures rose 1.95 cent to 93.32 cents a gallon. April natural gas futures fell 1.6 cents to $5.53 per 1,000 cubic feet.

On London's International Petroleum Exchange, May Brent blend crude oil futures ended up 51 cents at $33.31.

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