WASHINGTON (AP) – Gasoline prices dropped to just under $1.50 a gallon nationally this week reflecting a steady decline that the government says is likely to continue well into what is expected to be a heavy summer driving season.
The nationwide average of regular grade gasoline dipped to $1.496, the lowest since January, according to a survey by the American Automobile Association. It had been at a record high of nearly $1.73 a gallon in mid-March.
The price decline, reflecting lower crude oil prices and a growth in gasoline inventories in recent weeks, came despite growing demand and expected heavy highway travel this summer.
The AAA motorists’ club said that it expects 29 million people to take road trips over the upcoming Memorial Day weekend, the traditional start of the summer travel season. Its requests for trip maps was up 16 percent, compared to just before the war began in Iraq, the group said.
Earlier this week, the government’s Energy Information Administration put gasoline prices nationwide at $1.49 with expectations that prices would continue to decline in coming weeks, averaging about $1.46 over the summer months.
That would be about 10 cents a gallon higher than last year’s summer average, but dramatically lower than the record high of $1.73 reported by the EIA on March 17, two days before the outbreak of war with Iraq.
The price averages by Triple-A and the government vary slightly because of different reporting methods.
The price drop at the pump reflects the dramatic decline in crude oil prices from almost $40 a barrel just before the outbreak of the war to the mid-$20 range in recent weeks as well as growing gasoline inventories as refiners shifted from making heating oil to gasoline.
“The sharp fall in crude oil prices … and the general belief that world oil supplies are increasing sufficiently to relieve the tight inventory situation … has taken substantial pressure off U.S. gasoline and other product markets,” said an EIA report this week.
Crude prices have rebounded a bit with the spot price Thursday at $29 a barrel on the New York Mercantile Exchange.
While the EIA warned that gasoline markets could tighten if refining or distribution systems were disrupted, it said most likely prices will level off in the $1.46 range for the summer months.
According to the Triple-A, the average price of gasoline dropped 22.5 cents a gallon since mid-March, but that it still is 9.7 cents higher than the average a year ago.
Prices varied widely among regions of the country.
The lowest price was in the Southeast, where the average for regular grade was $1.38 a gallon, 12 cents cheaper than in mid-April. The highest was in the West, at $1.63 a gallon, also a drop of about 12 cents in four weeks.
The price in the Great Lakes region averaged $1.454, down 7.6 cents since mid-April; the mid-Atlantic region, $1.51 a gallon, a decline of 9.6 cents; New England, $1.55 a gallon, down 9.1 cents; and in the Southwest, $1.476 a gallon, a decrease of 9.6 cents.
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On the Net:
American Automobile Association fuel gauge: http://www.aaanewsroom.net/Main.asp
Energy Information Administration: www.eia.doe.gov
AP-ES-05-15-03 1709EDT
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