Crude boosts gas prices to record highs

Sticker shock at the pump is getting worse, the federal government said Monday as gasoline prices set record highs in California and across much of the nation.

The average price U.S. drivers paid for regular self-serve gasoline climbed to a new high of $3.389 a gallon after rising 5.7 cents over the last week, the Energy Department said. The national average is up 51.3 cents in the last year because of high crude oil costs.

The commodity closed Monday at a record $111.76 a barrel, up $1.62.

In California, motorists paid an average of $3.774 a gallon, a record and the highest price in the weekly survey of more than 800 service stations nationwide. The state average was 8.9 cents higher than that of the previous Monday and 46.9 cents higher than the level a year earlier.

The price of crude oil accounts for about 70% of the cost of making gasoline.

The Energy Department recently predicted gas prices could average as much as $3.60 a gallon this summer and said the daily national average could rise as high as $4 at times. Prices are already over $4 in some parts of the country.

But a growing number of analysts don’t believe the national average will rise that high unless unanticipated events occur.

“I don’t think so, unless there is some sort of outage or refinery event,” said Fred Rozell, retail pricing director at the Oil Price Information Service.

Barring such an event, prices could fall back to $3 a gallon, or lower, by late summer, said Jim Ritterbusch, president of Ritterbusch & Associates, an energy consultancy in Galena, Ill.

“Take your vacation late this year,” said Ritterbusch, who believes prices will dip in July or August.

Still, unexpected refinery outages have forced price spikes in the past. Last spring, a string of outages drove prices to record levels in May. Then they mostly fell until late in the year, when they began to track crude oil higher.

Prices normally rise in the spring as suppliers stock up in advance of the summer driving season and refiners switch over from making winter grade gasoline to the more expensive, but less polluting, summer version of the fuel. As they perform this switch, refiners try to sell all their winter fuel, driving overall supplies down.

“I think prices will top out in late June and July,” said Tony Kolton, chief executive of Logical Information Machines, a Chicago-based analytics and data provider. “We are entering the strongest season for crude oil right now as refiners prepare for the driving season.”

In the Energy Department’s latest survey, San Francisco was the city with the highest prices at $3.818 a gallon, up 9.5 cents.

The Gulf Coast states had the cheapest regional price at $3.285 a gallon, up 3.2 cents. Boston had the lowest city price, up 5 cents to $3.18.

The average price for diesel fuel soared 10.4 cents to a record $4.059 a gallon, up $1.18 from a year earlier, the agency said. Average diesel fuel prices were reported at $4 a gallon or higher in every region of the country. California’s average diesel price was $4.234 a gallon.