Average Gas Price Rises to $2.89 a Gallon

A new Hummer is on display outside a Hummer dealership in Richmond, Va., Wednesday May 31, 2006. New car sales figures are due out Thursday. Automakers release their sales figures for May. High gasoline prices were expected to have crimped sales of sport utility vehicle and trucks for domestic automakers. Some analysts are predicting that General Motors Corp. will be hit hardest because it is trying to wean itself off incentives and fleet sales, and because it relies heavily on truck-based SUVs. (AP Photo/Steve Helber) (Steve Helber - AP)

WASHINGTON -- The average U.S. retail price of gasoline rose by more than 2 cents last week to $2.89 a gallon.

The federal Energy Information Administration said Monday that U.S. motorists paid $2.892 a gallon on average for regular grade last week, an increase of 2.5 cents from the previous week. Pump prices are 77.6 cents higher than a year ago.

Average retail gasoline prices peaked at $3.07 a gallon last September, reflecting the extreme tightness in the market following Hurricane Katrina, which knocked out refineries in the Gulf region as well as pipelines that deliver fuel to the East Coast and Midwest.

Gasoline prices were most expensive last week on the West Coast, averaging $3.20 per gallon, and cheapest in the Gulf Coast region, averaging $2.764 per gallon.

One of the key factors underpinning the high price of gasoline is the cost of crude oil, which has been elevated by strong demand and geopolitical uncertainties.

Crude-oil futures settled Monday at $72.60 on the New York Mercantile Exchange. Gasoline futures closed at $2.1642 per gallon.