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Gas prices at 1980s record highs { May 21 2007 } Original Source Link: (May no longer be active)
http://www.reuters.com/article/domesticNews/idUSN2135732920070521?feedType=RSS&rpc=22http://www.reuters.com/article/domesticNews/idUSN2135732920070521?feedType=RSS&rpc=22
Gasoline price at inflation adjusted peak
Mon May 21, 2007 6:07PM EDT
By Tom Doggett
WASHINGTON (Reuters) - U.S. retail gasoline prices hit a record high for the second week in a row and matched the inflation-adjusted peak reached in the early 1980s during the Iran-Iraq war, the government said on Monday, as concern about low motor fuel supplies pushed up pump costs.
The average price for regular unleaded gasoline soared 11.5 cents over the last week to a fresh record of $3.22 a gallon, according to the federal Energy Information Administration's nationwide survey of 800 service stations.
The much larger Lundberg industry survey of 7,000 stations showed the national price of gasoline jumped 11.4 cents over the last two weeks to a record $3.18 a gallon.
The latest EIA pump price also equals the all-time high fuel cost of $3.22 a gallon, when adjusted for inflation, reached in March 1981 after war erupted between Iran and Iraq.
Guy Caruso, who heads the EIA, said on Monday that consumers should not see gasoline prices begin falling until next month.
"We are expecting that things should improve in June," he said. "We still have some more of the wholesale (gasoline) prices to pass through (to the pump). We're not at the peak yet."
Gasoline prices have skyrocketed $1.05 a gallon since the beginning of February and are up 33 cents from a year ago.
With several large refineries down this spring for maintenance or shut by problems, gasoline production has been reduced, cutting into available supplies.
However, the high pump prices are attracting gasoline imports, which recently hit the fifth highest weekly level ever at 1.5 million barrels a day.
Caruso said he expected imports to remain strong, which will boost supplies and, as more refineries return to operations, put downward pressure on pump prices later this summer.
LAWMAKERS BLAME BIG OIL
Many U.S. consumers, especially low-income families, are struggling to pay their bills given record gasoline costs. Lawmakers blamed oil companies for their financial woes.
"High gas prices are hitting families hard, but they're also causing our economy to stall and sputter like a jalopy," Rep. Edward Markey of Massachusetts said. He advocated increasing mileage requirements for U.S. vehicles to reduce gasoline demand and prices in the long term.
Sen. Charles Schumer, a New York Democrat, said one solution may be to dilute the power of oil companies.
"Breaking up the oil companies, undoing the mergers that occurred in the late '90s, is something we ought to look at because there is no competition," Schumer, who will chair a May 22 hearing on the topic, told reporters.
Oil companies told lawmakers at a May 16 hearing that higher prices reflect market conditions and the contention that companies are manipulating the market is "not credible."
In the EIA's new weekly survey, West Coast service stations had the most expensive fuel by region, down 0.6 cent at $3.37 a gallon. Among major cities, San Francisco had the highest gasoline costs at $3.51 a gallon, down 2.4 cents.
The Central Atlantic states had the lowest regional price at $3.08 a gallon, up 7.1 cents. Houston had the best deal at the pump at $2.98 a gallon, up 13.9 cents.
(Additional reporting by Thomas Ferraro)
© Reuters 2006.
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