Gas Prices in State Inch Down as U.S. Hits High

Gasoline prices nationwide hit a record high of $1.758 a gallon Monday. Prices in California, however, had their third straight weekly decline, but the drops were so small that they were unlikely to quell the furor in the state over pump prices.

Monday, the statewide average cost of a gallon of regular self-serve fell less than a cent to $2.079, according to the Energy Information Administration’s weekly survey of service stations.

Over the last three weeks, the average pump price in California has fallen just 3.3 cents a gallon, even though wholesale gasoline prices have fallen much more sharply.

This is the sixth straight week that gas prices in California have averaged more than $2 a gallon at the pump.

Nationwide, the average price consumers pay for gasoline increased 1.5 cents over the last week to $1.758 a gallon, the EIA said.

The latest national pump price, which is up 11 cents from a year ago, broke the old record of $1.747 a gallon for regular self-serve gasoline set Aug. 25, according to the EIA survey.

The weekly gasoline price is not adjusted for inflation. When adjusted for inflation in 2004 dollars, the highest nationwide average price was $2.99 a gallon in March 1981, EIA says.

The Energy Department’s analytical arm has said it expects gasoline prices to climb higher during the upcoming driving season, reaching a monthly average of $1.83 a gallon in April.

The record gasoline prices reflect strong motor fuel demand and high crude oil costs, which account for almost half the price of gasoline. The U.S. is the biggest customer of the Organization of the Petroleum Exporting Countries, which will meet Wednesday to decide whether to proceed with a planned output cut of 1 million barrels a day.

Limited refining capacity is also a major factor in the recent price rises in California.