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Gas Prices Up Sharply

Regular Unleaded Tops $2 Per Gallon Nationwide

By Joe Benton
ConsumerAffairs.com

March 17, 2006

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The average price of regular unleaded gasoline is up 7 cents and once again a gallon of regular gasoline costs more than $2 throughout the country.

With regular unleaded selling for an average of $2.43 a gallon, gasoline prices are at their highest levels of 2006. One month ago the average price was $2.27 a gallon. One year ago regular unleaded gasoline was selling for $2.06 a gallon.

The average price for diesel fuel is up as well, selling for $2.64 a gallon. One month ago the average price was $2.57 a gallon. One year ago it was $2.24 a gallon, according to AAA, of Hawthorne, Florida.

The highest price spotted for regular unleaded is now $3.79 a gallon in Ragged Point, California. The lowest price is found in Evanston, Wyoming at $2.03 a gallon.

New government regulations along with an expected springtime spike in demand for gasoline are driving prices up even as crude oil prices decline.

"Chances are prices will be higher than they are now in the coming weeks, as we use more gasoline, and new regulations make gasoline more expensive to make," says analyst Trilby Lundberg said.

"We will have higher gasoline prices this year, but probably not to exceed last year's all-time record high. The September 9 Katrina price for self-serve regular was $3.01. That's 66 cents higher than it is right now."

Lundberg says that the U.S. government has mandated lower sulfur requirements for gasoline and diesel fuel. New regulations require refiners to replace the gasoline additive MTBE with more costly ethanol.

The new rules and regulations combine to make gasoline more expensive for refineries to produce.

”With our demand building and those new recipe requirements coming into effect, gas prices will most likely surge much higher," she predicted.

The new round of price increases erase the 9 cent decline in gas prices that started January 20. "Those five weeks of declines were due largely to our being at the bottom of our gasoline-demand curve," Lundberg said.

Prices are not likely to fall again any time soon, according to Lundberg.

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