Regional gasoline prices rose an average of 7 cents per gallon last month, the largest monthly increase in nearly two years, according to the latest gasoline pricing survey by the mid-Atlantic division of the American Automobile Association.
Washington area consumers are spending an average of $1.21 per gallon for self-serve regular unleaded gasoline, nearly 10 cents a gallon more than they were paying at this time last year, according to AAA officials and petroleum industry analysts.
That's the good news.
The bad news is that gasoline prices probably will continue rising for the rest of the year, industry analysts said.
Since March, members of the Organization of Petroleum Exporting Countries have succeeded in cutting production of crude oil to help pump up prices and profits, which were in virtual collapse at the beginning of the year.
The result has been a dramatic increase in the per-barrel prices of benchmark crude oils, such as West Texas Intermediate, which was selling at $13.45 cents per barrel in August 1998 and is selling at $21.63 per barrel today.
Those higher crude prices translate into what should be a 19-cent-per-gallon increase at the pump, which means that area consumers actually are getting a price break on self-serve unleaded gasoline, said Philip K. Verleger Jr., an analyst with the Massachusetts-based Brattle Group.
"Consumers in the mid-Atlantic region are being protected from nearly half of the real increase in gasoline prices," mostly because there is a lag time between changes in crude prices and prices at the pump, Verleger said.
But that time cushion should disappear by the end of the year, Verleger said, and AAA officials agree.
"We're probably in for major price increases," said AAA mid-Atlantic spokesman Lon Anderson. "I'm sure that we're going to catch up with the rest of the nation."
Even with the increases, regional gasoline prices are 4 cents per gallon cheaper than the nationwide average, Anderson said.
Nationally, gasoline prices rose an average of 18 cents per gallon during the past month, to $1.255 per gallon for self-serve regular unleaded. The highest price increases were on the West Coast, where self-serve unleaded sells for an average of $1.42 per gallon.
Refinery production problems have contributed to the West Coast increases. And though they hampered only West Coast facilities, the problems also helped boost prices in the East. Verleger said the threat of spot gasoline shortages in the West caused the diversion of some gasoline stocks from East to West. That, in turn, lowered the availability of some gasoline in the East, which helped to support higher pump prices in this region, he said.
CAPTION: More at the Pump (This graphic was not available)