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Gas Prices Head to $4 a Gallon

Bush surprised by the news

By Joe Benton
ConsumerAffairs.com

February 29, 2008

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Consumers may soon face $4 a gallon gasoline as international oil prices settle in above $100 a barrel and the peak summer driving season nears.

"American consumers know these oil prices are an unpleasant omen of events likely to occur at the nation's gas pumps over the next few months," said Geoff Sundstrom, spokesman for travel and auto group AAA.

When President Bush was asked about the possibility of record $4 gas, he appeared to have a blank gaze on his face.

“Wait, what did you just say? You're predicting $4 a gallon gasoline?" the surprised president stammered. "That's interesting," he said, "I hadn't heard that...I know it's high now."

Gasoline prices have more than doubled during the Bush presidency. In 1999, as the oilman-turned-presidential candidate campaigned across the country for his party's nomination, gasoline sold for $1.30 a gallon almost everywhere he traveled.

Those low gasoline prices are history now.

"That creates a lot of uncertainty," Bush said. "If you're out there wondering what your life is going to be like and you're looking at $4 a gallon, that's uncertain."

Record highs

"If current oil prices hold, American drivers should expect to pay new record high prices for gasoline which could easily reach $3.50 per gallon or more by summer. In some regions of the country the average price could approach $4 per gallon," the AAA spokesman said.

The bad news at the pump arrives with declining U.S. fuel consumption and robust domestic production boosting gasoline inventories to their highest levels since 1994. Gasoline sold for less than a dollar a gallon in 1994.

The average national price for regular unleaded gasoline is now $3.16. One month ago the average price was $2.98 and one year ago regular gasoline sold for $2.41

Regular gasoline sells above the $3 mark in every state except Missouri and New Jersey. Regular gasoline sells for an average price of $2.98 a gallon in Missouri and $2.97 a gallon in New Jersey.

The most expensive gallon of gasoline in the country is found in Bethel, Arkansas for $4.94. The cheapest gallon is found in Lakewood, Colorado for $2.81.

Here is a look as some gasoline prices from around the country in the ConsumerAffairs.com Gas Price Round Up.

Texas: The average retail gasoline price in Texas is two cents shy of a new record for the state at $3.07 a gallon. The all-time Lone Star statewide record high is $3.09 a gallon, according to the AAA Texas gas price survey released today.

Seven of the eleven Texas regions AAA checks for average gasoline prices set new record highs this week.

San Antonio gas prices rose 8 cents to an average of $3.03 a gallon. It is the lowest average price but a record for San Antonio.

Texarkana once again has the state's highest average at $3.14 a gallon, which is also a record.

"Record crude oil prices above $102 a barrel propelled pump prices to new highs this week," said AAA Texas spokesman Rose Rougeau.

California: Price increases at Southern California gas pumps came fast and furious this week in an earlier-than-usual spring price run-up, according to the Automobile Club of Southern California's Weekend Gas Watch.

The statewide average for gasoline is $3.44 a gallon, 5 cents short of the record price set May 9, 2007.

The highest average price in the state is found in San Francisco where regular gasoline sells for $3.60 a gallon, 3 cents short of the record set May 11, 2007.

The average price of self-serve regular gasoline in the Los Angeles-Long Beach area is $3.37, which is 16.9 cents higher than last week, 24 cents more than last month, and 57 cents above last year.

In San Diego, the price is $3.43, which is 17.9 cents more than last week's price, 31 cents above last month, and 60 cents higher than last year.

On the Central Coast, the average price is $3.53, up 16.8 cents from last week, 26 cents above last month, and 56 cents more than last year.

In the Inland Empire, the average price is $3.39, 17.6 cents above last week, up 29 cents from last month, and 57 cents higher than last year.

"Californians are used to seeing gas prices rise quickly in the springtime, but this three-penny-a-day level of price increases is usually seen in March or April," said Auto Club spokesperson Jeffrey Spring. "San Diego is already within seven cents of its all-time record price, Santa Barbara is within eight cents, and most other areas are within 15 cents of breaking records. Oil industry analysts are saying that this spring's price spike is primarily being driven by investors bidding up the price of wholesale gasoline and oil."

Florida: Gasoline prices have set a new Florida record of $3.24 a gallon. $4 a gallon gasoline could be reality by May, a AAA spokesman said.

"We think it is a very real possibility, unfortunately," said Gregg Laskoski, spokesman for AAA Auto Club South in Tampa.

One month ago regular gasoline sold for $3.04 and one year ago the average gallon of gasoline statewide was $2.43.

The spring price run-up, typically when prices are highest, comes from refiners switching to more expensive blends as the summer driving season starts.

Now a gallon of gas costs $3.31 in West Palm Beach-Boca Raton.

"If we are looking at anything that remotely resembles what occurred last year from March through May, we could be looking at much higher prices," Laskoski said.

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