Gasoline prices should average $3.54 per gallon this summer, 60 cents more per gallon than during last year, the U.S. Energy Information Administration forecasts.
For the first time since 1991, U.S. demand for petroleum products is expected to decline this year.
Gasoline consumption could decline 0.4 percent this summer, the agency forecasts. However, growing world demand for oil, up 1.2 million barrels per day for the year, will keep upward pressure on crude oil prices, director Guy Caruso said.
At an energy conference Tuesday, the agency released its outlook for April through September.
On diesel fuel, Caruso said, summer prices should average $3.73 cents per gallon nationwide, or 87 cents per gallon more than last year.
The national average price for regular gasoline is expected to peak at $3.60 per gallon in May and June, although significantly higher prices, possibly above $4 per gallon, could be reported at some point, Caruso said.
The Gulf Coast will see the cheapest average gasoline price, $3.41 per gallon, he said.
The average on the East Coast and in the Midwest should be around $3.50 per gallon for the summer, with West Coast residents paying the most, on average $3.78 a gallon.
The agency’s lower consumption projections are based, in part, on the expectation that the nation undergoes a mild recession in the first half of the 2008.
Caruso’s agency adjusts its projections for gasoline use to take into account the lower energy content of ethanol, which is blended with gasoline sold in many parts of the country. The gasoline market is even weaker, down about 0.9 percent, when the energy content of fuel is taken into account.
Cautioning about the uncertainty in the outlook given the volatility in energy prices, Caruso added that natural-gas prices should average $8.59 per 1,000 cubic feet, up from $7.17 last summer.
He predicted that electricity prices nationwide will run 2.7 percent above last summer’s average. Temperatures the past two summers have been above normal, but the forecast is based on normal weather, Caruso said.
Contact Greg Edwards at (804) 649-6390 or gedwards@timesdispatch.com.
Email
Facebook
Google
Twitter
Favorites
More
Advertisement