Fuel Prices Jump 9 Cents in U.S., 7.4 Cents in State

U.S. retail gasoline prices jumped 9 cents to an average of $2.588 a gallon, a federal survey showed Monday, as uncertainty continued over the availability of summer supplies.

California’s average pump price rose 7.4 cents to $2.743 for a gallon of self-serve regular gasoline, according to the U.S. Energy Department’s weekly service station survey.

The biggest increase came along the Gulf Coast, where the average price surged 11.4 cents to $2.571 a gallon. That region is in the midst of a huge refinery maintenance effort that was delayed by hurricane damage in 2005.

Gas prices began rising in mid-February and have added nearly 35 cents a gallon to the U.S. average and about 30 cents to the California average since then.

Fuel prices often increase in the first quarter as traders worry about summer supplies and refiners make their annual switch to summer gasoline formulas designed to control emissions in higher temperatures, said Tom Kloza, chief oil analyst for Oil Price Information Service, a price-tracking company.

U.S. gasoline prices remain 37.1 a gallon cents higher than one year ago, while California’s prices average 27.9 cents above those in the same period last year.

Another concern reflected in the price jump nationally was the cost and availability of ethanol, a gasoline additive.

Several refiners are switching to ethanol from methyl tertiary butyl ether, or MTBE, for the summer driving season. Congress chose not to pass liability protection last year for the makers of MTBE, a component of cleaner-burning gasoline that was banned in California in 2004 because of its link to groundwater contamination.

“We are replacing MTBE with expensive ethanol, all with a backdrop of restricted refinery capacity,” Kloza said.

Despite the big jump, gasoline prices probably won’t break last year’s record, Kloza said. His firm pegged the high at about $3.06 a gallon last Labor Day weekend.

“The probability is you are not going to get refineries knocked out by tropical systems in the summer, although this will be the year of hurricane hype and hysteria,” Kloza said. “It will take a geopolitical event or a refinery event, like a fire, to drive prices that high.”

The average price of diesel fuel in California rose 8.5 cents to $2.812 a gallon, 23.1 cents higher than in the same week of 2005. The U.S. diesel average rose 5.2 cents to $2.617 a gallon, 31.4 cents higher than a year ago.

In New York futures trading Monday, light sweet crude oil for May delivery rose 11 cents to $66.74 a barrel. May gasoline futures fell by 2.1 cents to $1.863.