The Biggest Jump at the Pump

The soaring prices stir memories of spikes in the late 1970s and early 1990s. But adjusted for inflation, regular gasoline remains below the 1981 high of $3.11 a gallon, according to the Energy Department.

Prices around the Washington area have roughly mirrored the national price increase, according to a survey sponsored by the AAA auto club.

Gas prices in the region and around the country can vary widely. Different jurisdictions' gasoline taxes are a big factor, as is local competition among stations. Other factors include differences in real estate prices and environmental regulations that require some regions to use different blends of gasoline.

Oil prices have been rising in the past year as worldwide demand has grown and suppliers have struggled to keep up. Oil traders are concerned that in the event of a terrorist attack on oil facilities in one part of the world, there would not be enough spare production elsewhere to pick up the slack.

Demand for gasoline in the United States has been increasing despite the steady rise in prices -- though analysts said the rate of increase probably would be higher otherwise. Gasoline demand has increased by 0.6 percent this year compared with the same period last year, according to the Energy Department.

Domestic refineries have been running full tilt to keep up with demand, and traders expressed concern after inventories of gasoline declined last week. Fears of tropical storms affecting gasoline production, along with refinery outages caused by fires and malfunctions, have been adding to fears about the adequacy of supplies.

Companies that produce and refine oil have been reaping bigger profits as prices of oil and gas have spiked, analysts said. The largest United States-based oil company, Exxon Mobil Corp., reported last month that its second-quarter profit was up 32 percent, to $7.64 billion.

Yesterday, U.S. benchmark crude oil for September delivery on the New York Mercantile Exchange closed at $66.27 a barrel, down 59 cents from Friday.

Economists have had trouble figuring out how high prices will have to go before the economy seriously suffers. Some predicted doom last year after oil climbed to $50 a barrel.

Several economists said yesterday that the price of gas would need to remain above $3 or $3.50 for several months for the economy to slip into recession.

"I think when you get closer to $3 a gallon . . . people are going to start to feel the effect and have to start substituting gas for T-shirts or clothing or eating out," said Joseph Quinlan, chief market strategist at Bank of America Corp. in New York.

Some industries -- particularly transportation companies -- are feeling the brunt of rising fuel costs. FedEx has a 12.5 percent fuel surcharge for express deliveries, company spokesman Howard Clabo said.

Airlines, suffering from high jet fuel prices, have been gradually boosting fares. Southwest Airlines yesterday became the latest to raise fares, according to Bloomberg News.

Truck drivers such as Terry Benavidez also are feeling the pinch. She gets only about eight miles a gallon on her 18-wheeler Volvo truck.

Watching gas prices rise, Benavidez, 44, said, "I'm just scared. I'm nervous about how much it's going to take to fill up my tank."