Ford expects gasoline to reach up to $4.25 a gallon

The No. 2 U.S. automaker made clear this week that pressure at the pump has leaked directly onto automakers' balance sheets.

Ford Motor Co. executives said Thursday, May 22, that gasoline prices were a deciding factor in its decision to abandon earlier predictions for a return to profitability. According to Ford CEO Alan Mulally,"It seemed to us that we reached a tipping point where customers began shifting away from (larger) vehicles at an accelerated rate." Ford's revised plans now account for average U.S. gasoline prices to range from $3.75 to $4.25 a gallon throughout 2008 and in 2009. Unfortunately, Oil Price Information Service, reports that with so many possible variables that could impact prices through 2009, it's difficult to say whether Ford will need to change those projections as well.

As of today, regular unleaded gasoline averaged $3.88 across the country, up 34 cents from a month ago. Midgrade went up 36 cents to $4.11 a gallon. Premium reached another record by averaging $4.26, up 38 cents from a month ago. Diesel averages had the highest increase at 44 cents, reaching $4.65 a gallon, according to AAA, of Heathrow, Fla.