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National average eclipses last year’s record gas prices

Reuters News Service
NEW YORK - U.S. average retail gasoline prices hit an all-time high on Tuesday as a tight-fisted OPEC policy and rising demand constricted supplies, according to the American Automobile Association.

The average price for regular gasoline at the nation’s pumps was $1.738 per gallon, up a tenth of a cent from the previous record hit in late summer 2003, according to the motorist group’s survey of more than 60,000 stations.

“Unstable gasoline prices make budgeting for fuel costs extremely difficult for families and businesses,” AAA stated in a release, urging new policies to simplify production and distribution of fuels.

Energy prices have been rising in recent months, with U.S. stockpiles lingering near their lowest levels since the 1970s amid an economic recovery that has spurred higher demand.

Oil producer group OPEC, which controls roughly half of the world’s exported crude, is mulling whether to further cut global supplies starting April 1, adding to a series of cuts that have brought oil prices to nearly $40 a barrel.

The U.S. government on Monday (March 22) predicted prices would average a record $1.83 per gallon in April and May during the run-up to the summer driving season when Americans typically take to the road.

The head of the Energy Information Administration, Guy Caruso, said at an oil industry meeting in San Antonio on Monday that he was “really concerned” about thin U.S. gasoline inventories, which are running about 13 million barrels lower than the agency had projected.

The volatile gasoline landscape has drawn the attention of lawmakers from both political parties, making it a likely issue in this presidential election year.

Democratic Sen. Ron Wyden of Oregon this week reintroduced a bill requiring the Federal Trade Commission to act on what he called anti-competitive industry pricing policies.

The FTC earlier this month opened an informal probe into California’s retail gasoline prices – the highest in the nation – at the urging of Democratic Sen. Barbara Boxer of California.

Oil and gas refiners have denied using any anti-competitive practices, instead blaming high prices on tight supplies caused by dozens of different gasoline-blending rules for metropolitan areas and the lack of enough imports of the motor fuel.

Republican Sen. Chuck Grassley of Iowa said soaring gasoline prices are a good reason for the Senate to pass a stalled energy bill.

AAA added in its release that state and federal government officials need to take another look at policies that have resulted in more than 15 different varieties of gasoline being used across the United States each summer.

“While these ’boutique’ fuels have helped clean the air, they also have seriously hampered the efficient production and distribution of gasoline,” AAA said.

AAA is the largest motorist and travel group in the United States, with about 47 million members.

Photo caption: In Chicago last week, a gallon of unleaded gas was just under $2 a gallon. AAA said Tuesday average U.S. prices are at record highs. (Photo compliments of Frank Polich, Reuters News Service)