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Gas Prices Top $3 in Much of the U.S.

Average Price is Up 10.73 Cents in Two Weeks

By Joe Benton
ConsumerAffairs.com

July 10, 2006
The average price of regular self-serve gasoline is now above $3 a gallon in 16 states and the District of Columbia while throughout the rest of the country the price lingers just below $3.

The prestigious Lundberg Survey places the national average price at $2.995 per gallon, up 10.73 cents in two weeks. The AAA Fuel Gauge Report places the national average price at $2.965.

The all-time high national average for the price of regular self-serve was set September 9, 2005 at $3.01 following Hurricane Katrina.

As consumers continue to motor through July, the lowest price for gasoline in the country now is $2.70 a gallon in Charleston, South Carolina while the highest price is still in Honolulu at $3.27 a gallon.

Gasoline prices are reflecting the rise in crude oil. Increasing geopolitical tensions, particularly the ongoing nuclear standoff between the West and Iran, are driving the oil market. Iran is the second-largest oil producer in the Organization of Petroleum Exporting Countries.

The North Korean missile tests are adding pressure to the upward movement in crude oil prices as well.

"This is crude oil at work more than any other factor," said industry analyst Trilby Lundberg. "There's been a fresh upsurge in the price of crude because of even greater tensions about the world oil market."

The average mid-grade gasoline price is now $3.10 a gallon while premium sells for an average of $3.20.

Lundberg no longer sees a price decline in the near future.

"The chances of prices falling any time soon seem very weak. We do however have gasoline demand no longer growing because of these high prices and that helps supply," she said.

If there is a new oil supply emergency, Lundberg says she does not expect prices to rise substantially.

Around the country ...

Michigan: Gasoline prices rose by more than 4 cents over the past week to top $3 a gallon, according to the latest survey by AAA Michigan.

The current statewide average is $3.02. The price is 67 cents higher than last year at this time.

AAA says the current average is just shy of Michigan's all-time high average gas price of $3.048, recorded on Sept. 6, 2005.

Virginia: Prices at the pump are expected to rise dramatically in the next few days. Regular gas is now about $2.87 a gallon, but prices are expected to jump up to $3 a gallon by the weekend.

Consumer demand is also driving gas prices up in Virginia. AAA predicts anything under $3 a gallon will seem like a bargain by the weekend.

Indiana: Consumers are already feeling the pinch in Indiana where the average price of regular unleaded is more than $3 a gallon.

Hoosiers are paying more than the national average and prices may go higher by summer's end.

Also on the rise is fuel consumption, which is at nearly record levels.

Wal-Mart says sales dropped in Indiana for the month of June. The company blames high gas prices, saying people don't have as much money to spend.

Massachusetts: Gas prices hit $3.01 per gallon, marking the first time the statewide average has exceeded $3 since Hurricane Katrina sent prices to record highs last September, according to AAA of Southern New England.

The average price for self-service unleaded was up 4 cents from a statewide survey conducted a week earlier, and compared to an average of $2.35 a year ago, the automobile association said.

The last and only time the statewide average exceeded $3 was last September, when damage to Gulf Coast oil rigs and refineries caused by Hurricane Katrina sent prices to record highs.

The survey found prices as low as $2.79 to as high as $3.19.

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