Pump Prices Keep Falling

Average retail gasoline prices continued to fall in California and the rest of the nation, the government’s top energy forecasting agency said Tuesday, but rising oil prices and increasing demand could cut short the decline soon.

In California, the average cost of a gallon of self-serve regular gasoline dropped 4.9 cents during the last week to $2.473 while the U.S. average declined 4.4 cents to $2.24, according to the federal Energy Information Administration’s weekly survey of service stations. The California average was up 32.3 cents from a year earlier and the U.S. average was up 33.5 cents.

The drop in pump prices reflects the recent fall in crude oil prices, which account for about half the cost of making gasoline. The agency has said that U.S. consumers should enjoy falling gasoline prices through the end of February, and then pump costs probably will move higher as the busy spring driving season gets underway and gasoline demand picks up.

In New York futures trading, light, sweet crude for March delivery jumped $1.22 to $61.10 a barrel Tuesday after militant attacks shut in a fifth of Nigeria’s oil supply. The New York Mercantile Exchange was closed on Monday for the Presidents Day holiday.

In the agency’s latest weekly survey, the West Coast had the most expensive regional gasoline, with the price down 4.6 cents at $2.41 a gallon as of Monday; the prices were released a day late because of the holiday. Los Angeles topped the survey of cities, with gasoline down 4.3 cents at $2.507 a gallon.

The Midwest and Gulf Coast states had the cheapest gasoline at $2.167 a gallon, down 2.2 cents and 4.4 cents, respectively. Among major cities, Cleveland had the best deal at the pump, down 9.3 cents at $2.112 a gallon.

Separately, the average diesel fuel price paid by truckers fell 2.1 cents in the last week to $2.455 a gallon, up 43.5 cents from a year earlier, the agency said. In California, truckers paid the most for diesel at $2.674 a gallon, down 3.5 cents from last week.

Reuters was used in compiling this report.