LOS ANGELES – Retail gas prices hit another record high during the past three weeks, mirroring a rapid increase in the cost of crude oil, according to a recent nationwide survey. The average price for all three grades rose nearly 20 cents to $2.53 in the three weeks ending Aug. 12, said Trilby Lundberg, who publishes the semi-monthly Lundberg Survey of 7,000 gas stations around the country. The figures were not adjusted for inflation.
In the same three-week period, crude oil price futures rose about $8.21. A barrel of oil produces about 42 gallons of gasoline, resulting in a price increase of 19.6 cents per gallon — nearly identical to the 19.8-cent rise in the price of gas at the pumps, Lundberg said.
Demand for gas will remain high through August, but should drop after Labor Day. Lundberg said prices should soften after that assuming underlying crude oil prices hold stable and refinery activity and shipments aren't interrupted by natural disasters, such as major hurricanes.
Retail prices have risen an average of 70 cents since the beginning of the year and are up 62.7 cents from last August, Lundberg said. Still, adjusted for inflation, prices have yet to climb to the record levels reached in the 1980s: Gas prices in March 1981 would be $3.03 per gallon expressed in today's dollars, Lundberg said, while a barrel of oil would be about $90.
Despite higher gasoline prices, many people are still paying for fuel because they need it. Thomas Mesfin, a limousine driver in Washington, D.C., says he has to buy gasoline every day. He says he makes a good living with his vehicle, but fuel costs are getting very expensive.
Other motorists are worried that rising prices will force many people to park their cars. And some are wondering what the oil companies are doing with the money, and why the government won't tap domestic reserves. One motorist at a service station in northern Virginia says she's glad that she only has one car to fill at $2.71 a gallon.
A new Associated Press/AOL poll indicates that nearly two thirds of the respondents expect gasoline prices to cause money problems for them within the next six months.