WASHINGTON - Higher crude oil prices and rapid increases in mid-spring spot prices for gasoline have led to a sharp upward shift in this month's forecast for gasoline pump prices from the U.S. Department of Energy's (DOE's) Energy Information Administration (EIA).

The EIA now expects national average regular gasoline prices to be about $1.94 this summer (April through September), a significant rise over the $1.76 per gallon projected in April. The June price is now expected to peak at about $2.03 per gallon, compared to a peak of $1.82 projected last month.

Actual spot prices for gasoline between early April and the first week of May increased by 20 cents per gallon or more (depending on the region), indicating that factors in addition to higher crude oil prices are now playing an important role in setting gasoline prices, says the EIA. Demand increases and lower-than-expected imports have put strong pressure on domestic producers and gasoline stocks to help meet the demand for gasoline, contributing to higher production and acquisition costs, the agency says.

Publication date: 05/17/2004