Gasoline Prices Climb Sharply, Hit New High
Friday, August 12, 2005
District cab driver Abdulai Conteh is tired of paying more for gasoline each time he pulls up to the pump.
"It just keeps going up," said Conteh, who was paying $2.63 a gallon yesterday to fill his black taxi with premium grade gas at a BP-Amoco station at Ninth and N streets NW.
"I have to think twice now about what I'm spending money on for my family," said Conteh, whose bill came to $41. He said he paid $15 to $18 to fill his tank a few years ago.
Conteh was lucky he stopped by the station early in the afternoon -- by 5:30 p.m. the operator had raised the price of premium another 6 cents, to $2.69. The average price of premium in the Washington area yesterday was $2.614 a gallon, according a survey published by AAA.
A gallon of regular in the Washington area hit a record $2.398 on average yesterday, according to the AAA survey. That's up 27 percent from a year ago, when a gallon of regular cost $1.89 in the Washington area.
Consumers are facing further price hikes, according to AAA. The motorist group said it expects another 5 cents a gallon increase nationwide by this weekend. "That is a pretty dramatic jump given the fact that we're already at record high levels," said Mantill Williams, a spokesman for AAA.
Oil also surged to a record yesterday. U.S. benchmark crude oil for September delivery closed on the New York Mercantile Exchange at $65.80, up 90 cents.
Adjusted for inflation, oil prices peaked in 1981. Gas prices also peaked in 1981 at an inflation-adjusted $3.108, according to the U.S. Energy Information Administration.
Some drivers in the District said climbing gas costs were forcing them to adjust their behavior. Shyrelle Eubanks of Kettering said she signed up for a Costco membership in order to take advantage of the discount retailer's lower gas prices. "I find I'm going out of my way to get [cheaper] gas," said Eubanks. Driving a few extra miles to fill up at Costco saves Eubanks at least 10 to 15 cents per gallon, she said.
Prices are rising as worldwide demand for oil surges, particularly in China. Oil producers have only a small cushion between demand and the amount that can be pumped from the ground. The market appears to fear that significant supply disruptions could lead to a shortage.
In recent days, analysts said, fears of violence and political disputes in the Middle East have contributed to oil price increases. The market also has reacted to refinery problems that have resulted in diminished gasoline production.
A forecast from the Energy Information Administration projects that retail gasoline prices will continue to average above $2.10 per gallon on a monthly basis through 2006. Diesel is expected to average above $2.20 every month between now and the end of 2006, according to the EIA.
That forecast assumes that oil prices will not average significantly below $55 a barrel through 2006. "Should crude oil prices drop below our forecast over the next 16 months or so, we could see retail gasoline and diesel prices drop below $2 per gallon, but absent such a dramatic drop, it does appear that retail gasoline and diesel prices will remain above $2 per gallon for the foreseeable future," according to the EIA.
Staff writer Justin Blum contributed to this report.