Gas Prices to Fall

05/02/96

The national average price for unleaded gasoline is about $1.30 per gallon, about 20 cents per gallon higher than it was at New Years. The prices have been held high by low crude oil inventories and high demand for fuel, but analysts say lower prices are just around the corner as refineries step up production for the peak driving season and as foreign oil hits the market to satisfy demand.

Gasoline inventories have increased slightly in the past two weeks, although the nation's refineries are already working at about 93% of capacity. Retail prices could ease if wholesale prices stay down for a couple more weeks. Generally, retail gasoline prices rise 2 weeks after wholesale prices go up. It usually takes retail prices a month or so to drop when wholesale prices go down.

High fuel prices have provoked a lot of posturing in congress, including Senator Dole's calls for the repeal of a 1993 increase in gas tax, and President Clinton's request that the federal government explore why prices rose so much.

Paul Dever -- The Auto Channel