U.S. gasoline price down for first time in 11 weeks

WASHINGTON, Feb 24, 2003; Tom Doggett writing for Reuters reports that U.S. retail gasoline prices dropped for the first time in 11 weeks, but pump prices are still expected to hit a record high this spring, the government said on Monday.

The national price for regular unleaded gasoline fell 0.2 cents over the last week to $1.658, based on a survey of service stations by the Energy Department's Energy Information Administration.

That still would be up 54 cents from a year ago, since rising crude oil prices due to market fears of a U.S.-led attack on Iraq have pushed up gasoline costs.

The surprise price relief for consumers not expected to last long.

Dave Costello, an EIA economist, predicted that the national pump price for regular gasoline will surpass the all-time high of $1.71 gallon reached in mid-May 2001.

"We think we're going to break the record," he said.

In the oil markets on Monday, U.S. crude oil prices topped $36 a barrel due to concerns of a possible war with Iraq, low petroleum inventories and strong oil demand. Crude oil costs account for about 40 percent of the price of a gallon of gasoline.

Costello said even if crude oil prices do not further rise dramatically, gasoline costs will continue their upward trend.

"There's still momentum in the gasoline prices," he said.

Democratic presidential candidate Sen. Joe Lieberman on Monday called for the Bush administration to investigate whether oil companies are gouging consumers at the pump.

Lieberman, along with other lawmakers and consumer groups, have questioned whether big oil companies have taken advantage of war concerns to boost gasoline prices more than would be justified by the rise in crude oil costs.

The national price for cleaner-burning reformulated gasoline, which is sold at about one-third of the gas stations in more polluted metropolitan areas, increased 1.9 cents in the last week to $1.741 a gallon, EIA said.

The West Coast had the most expensive regular unleaded gasoline, with the average price in the region up 6.1 cents to $1.847 a gallon, EIA said.

The Gulf Coast states had the cheapest gasoline, but the average price was up 0.1 cents to $1.582 a gallon.

Among cities, San Francisco maintained the top spot in fuel costs, with the price up 4.8 cents to $2.011 a gallon. Houston had the cheapest gasoline, as the price fell 0.1 cents to $1.567 a gallon.

The report also showed gasoline prices were up 5 cents in Los Angeles at $1.886, up 0.9 cents in Chicago at $1.721, up 0.9 cents in New York City at $1.694 and down half a penny in Denver at $1.598.

The biggest year-on-year change in city pump prices was in San Francisco, where gasoline costs were up 71 cents a gallon from a year earlier.

Separately, the price for diesel fuel increased half a penny to a record $1.709 a gallon, up 56 cents from last year.

Truckers in the New England states paid the most for diesel fuel at $1.888 a gallon, up 0.3 cents from the prior week. The Gulf Coast states had the cheapest diesel at $1.673 a gallon, also up 0.3 cents from the previous week.