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Gas Prices Go Up as Summer Driving Season Begins

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Pay at the PumpSummer driving season is here, and although fuel prices are nowhere near the crushing costs of last summer, gasoline prices are going up.

According to AAA’s Fuel Gauge Report, prices went up today for the 22nd day in a row.

AAA, which surveys 100,000 stations daily, found that today’s national average topped $2.36 per gallon for regular gas, up from $2.06 last month, but down significantly from last year’s average of almost $3.81 per gallon.

Online resource GasBuddy.com, which pulls its figures from network of volunteer “gas prices spotters,” pegged national gas prices at $2.38 as of today, up significantly from $2.05 from last month, but down from $3.84 last year.

Fuel prices bottomed out in December, but since January have steadily been rising. In general, gasoline prices tend to rise gradually throughout the spring, peak in late summer and then drop in the winter. In the summer, gasoline demand tends to be about 5 percent higher than the rest of the year; prices traditionally go up 10-20 cents between January and summer, if crude oil prices remain steady.

Fuel GaugeBut crude oil prices have gone up. According to the Houston-based investment firm Raymond James & Associates Inc., crude oil prices recently rose above $60 a barrel for the first time since November, after holding steady around $50 per barrel. In December prices had dropped to about $34 a barrel, a sharp contrast to last summer when they reached an all-time high of $147 a barrel.

Contributing factors behind the recent rise include shrinking stockpiles of gasoline and political tensions in the Niger Delta that have reduced output. On Tuesday, Nigerian security forces and militants clashed near a Chevron oil site, putting further strain on the industry.

That said, analysts don’t expect fuel prices to rise significantly over the summer. AAA has stated that fuel may reach a maximum of $2.50 per gallon before dropping back down after Labor Day, but they may not even go that high. Although demand naturally rises in the summer, the tough economy has resulted in lower demand overall.

And as anyone who has compared prices at the pump between, say California and the Gulf Coast, knows, fuel prices can vary drastically between regions. Right now, the average price in the West Coast is about $2.50 per gallon; $2.30 per gallon in New England and the Midwest, and $2.20 per gallon on the Gulf Coast.

The reason for this disparity are manifold, including regional taxes, distance from supply sources such as refineries and pipelines,  and supply disruptions such as the refinery shutdowns after Hurricanes Katrina and Rita in 2005.

Trying to save this holiday weekend? Check out some of these handy resources:

  • GasBuddy.com – provides the cheapest gas prices in your city
  • Fueleconomy.gov – offers side-by-side ratings of gas mileage, emissions and air pollution ratings for vehicles; also offers tips on how to reduce your gas mileage usage
  • Federal Trade Commission Consumer Alert  – offers tips on how to increase fuel efficiency on the road
  • AAA.com – features a weekend gas watch, which monitors the average price of gasoline at popular road-trip destinations
  • Fuelcostcalcultator.com – AAA’s calculator of fuel consumption and cost based on route and vehicle
  • Energy Information Administration – Official weekly energy statistics from the U.S. government

By Sarika Chawla for PeterGreenberg.com.

Related links: Oil & Gas Journal, Raymond James, Fuel Gauge Report, CNN, Reuters

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