Gas Prices Jump And Are Set to Keep On Rising

Gasoline prices rose nationwide in the past month and were highest in California, where the average was $3.09 per gallon. San Francisco, above, had the highest average at $3.25 per gallon.
Gasoline prices rose nationwide in the past month and were highest in California, where the average was $3.09 per gallon. San Francisco, above, had the highest average at $3.25 per gallon. (By Justin Sullivan -- Getty Images)
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By Sholnn Freeman and Bill Brubaker
Washington Post Staff Writers
Tuesday, March 13, 2007

Gasoline prices have jumped 33 cents a gallon across the United States over the past month and are expected to climb still higher at least through March, according to the AAA automobile club.

Nationwide, the average price of a gallon of regular gasoline rose to $2.54 yesterday from $2.21 a month ago, according to a survey by AAA. Analysts blamed higher crude oil prices, greater demand and fears of shortages.

The average price in the Washington region was $2.50 per gallon, up from $2.18 a month ago, AAA said.

"In the Washington area, it's up, up and away," said John B. Townsend II, a spokesman for AAA Mid-Atlantic. "We've never seen prices heat up this early" heading into the spring and summer driving seasons.

"And prices are headed higher," Townsend said. "We're talking 15 cents to 20 cents higher by the end of the month."

If the upward trend persists, auto companies and political leaders could start to feel the heat, analysts said. House Democrats, using their new clout after gaining control of Congress in the November elections, plan to pressure auto executives on fuel-economy standards at a hearing tomorrow. The automakers say higher standards would cost the industry billions of dollars.

Even people with small cars were bothered by the price escalation. Renee Jackson of Northeast Washington filled up her Hyundai Tiburon on Saturday and complained about the price.

"It was $30 for a little car," Jackson said, adding that prices change too quickly. "All of a sudden it's $2.45, and then $2.76. They just kind of shoot up."

The average price in the District was $2.54 a gallon, up from $2.26 a month ago. A station in the Dupont Circle neighborhood charged $2.78 for regular over the weekend.

In Maryland, the average price yesterday was $2.51. In Virginia, the average price was $2.41.

Prices were highest in California, where a gallon of regular sold for an average $3.09. In the San Francisco area, drivers paid an average $3.25.

"It isn't clear yet how prices might affect sales of large SUVs and pickup trucks, which have already experienced sharp declines in recent years," said Alex Rosen, an industry analyst at Edmunds.com, a consumer automotive Web site.

Rosen said, however, that higher gas prices were putting more pressure on minivan sales. He said many consumers were choosing crossover sport-utility vehicles, like the Honda CR-V or Ford Edge. Those SUVs are lighter than minivans and get better fuel economy, he said.

The higher gas prices were driven, in part, by higher crude oil prices, which have been about $60 a barrel in recent weeks, though the price of light sweet crude closed yesterday at $58.91 a barrel, down $1.14.

There is a supply-and-demand issue at work, too. Supplies tighten as oil refineries adjust from making winter fuels to producing summer fuels, and demand rises as people hit the highways during warmer weather, Townsend said.

Gas prices vary widely from state to state and even within cities, reflecting the cost of transporting fuel and the rents paid by service stations, among other factors. In the Washington area, for example, while regular gasoline was selling for less than $2.40 in Manassas yesterday, the price topped $2.60 at several stations in the District.

The Rev. Patricia Downing of Northwest Washington, who drove her Ford Taurus to the grocery story yesterday, said higher prices brought to mind the war in Iraq and Hurricane Katrina.

Downing said that until prices fall, she would be a careful comparison shopper. "I'm much more conscious of looking for the lowest possible price and filling up when I do find cheap gas," she said.



© 2007 The Washington Post Company