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Wednesday, March 24, 2004

Gasoline prices surpass record levels in 15 states


Motorists could soon be paying even more at pumps

By Doug Abrahms
Gannett News Service

WASHINGTON - Gasoline prices nationwide hit a record high Tuesday, and motorists could be in for more sticker shock at the pump.

High crude oil costs and lower refinery capacity have pushed pump prices to nearly $1.74 a gallon, topping records set last Labor Day weekend, the AAA auto club said. The AAA survey monitors gas prices at more than 60,000 stations nationwide on a daily basis.

California drivers already are paying more than $2 a gallon for regular gasoline.

The government is forecasting record prices nationwide this spring, when refineries cut production to switch to lower-polluting summer blends of gasoline, and another price spike around Labor Day, when end-of-summer vacations increase demand.

The U.S. Energy Information Administration said gas prices nationwide could jump 10 cents a gallon this spring if the Organization of Petroleum Exporting Countries follows through on threats to cut production.

Congressional Democrats and the Bush administration are pointing fingers at each other for not doing enough to lower prices, which have soared more than 20 cents since Jan. 1.

Among the steps Democrats want the administration to take:

• Push Middle Eastern nations to increase oil supplies, especially with 200,000 U.S. troops deployed in the region to provide security and fight terrorism.

"It would seem to me to not be asking too much of our president to jawbone those leaders to increase production," said Sen. Edward Kennedy, D-Mass.

"We've ... made clear we're not going to beg for oil," responded Energy Secretary Spencer Abraham. Later he told reporters that he could not discuss private conversations with OPEC officials. "We have had a lot of contacts at a lot of levels," he said.

• Stop buying oil for the Strategic Petroleum Reserve, which is 93 percent full now. Fifty House members sent a letter to Bush this week asking him to stop filling the emergency reserve, saying it pushes prices higher at a time of low crude supplies.

• Investigate whether companies are manipulating prices. Sen. Ron Wyden, D-Ore., is pushing a bill to give the Federal Trade Commission more authority to curtail anti-competitive practices that lead to higher gas prices.

The Bush administration and industry officials blame the price spikes on high oil prices, lower refinery output as facilities do routine maintenance and switch to summer blends, and Americans' growing appetite for gasoline. Gasoline demand is growing 1 percent to 2 percent annually while the number of refineries shrinks.

Its remedy is for Congress to pass an energy bill that has been languishing for months. The legislation promises to increase oil, natural gas and electricity supplies through tax incentives and easing of regulations.

"Until we act on a comprehensive energy bill, we will always be facing these (price spike) issues in cycles," said Energy Department spokeswoman Jean Lapato.

The energy bill is stuck in the Senate, blocked by lawmakers who oppose numerous tax breaks and the loosening of environmental regulations.

States where gas prices hit record highs Tuesday, according to AAA, formerly the American Automobile Association, are:

Alabama, Arkansas, Florida, Georgia, Louisiana, Maryland, Maine, Mississippi, North Carolina, South Carolina, Tennessee, Texas, Virginia, Vermont and West Virginia.

Ohio, Ky. fare better

Gas prices in Greater Cincinnati are not anywhere near record levels.

The average price Tuesday on the Ohio side of the river was $1.67 for a gallon of unleaded gas, according to AAA's Daily Fuel Gauge Report.

That was down from $1.71 Monday. Tuesday's price also was about 2 cents less than the same day a year ago. The record was $1.89 a gallon on June 20, 2000.

The price Tuesday in Northern Kentucky was $1.72, down from $1.74 Monday. Tuesday's price was two cents higher than a year ago. The Northern Kentucky record, according to AAA, is $1.86, set on May 31, 2001.




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