Gas edges toward $2

By Johnny Jackson


Gas prices this year could be significantly lower than they were in 2008, according to U.S. energy officials.

Economists with the Energy Information Administration (EIA) project the average price for a barrel of crude oil will be less than half of what it was in 2008. The EIA expects the average price for crude oil to be $43.25 per barrel this year, compared to $99.55 per barrel in 2008.

Crude oil prices on the New York Mercantile Exchange (NYMEX), however, remain relatively low, at about $40 per barrel, while retail gas prices increase daily.

Contributing to the steady increase in the retail price of gasoline is the low output of U.S. refineries, said Gregg Laskoski, a spokesman for AAA Auto Club South.

Although it is common at this time of year for refineries to temporarily take units off-line for seasonal maintenance, the Department of Energy says the nation's refinery output levels of 82 percent of capacity a week ago, and 83 percent this week, are the lowest output levels seen in the months of January or February since 1992.

"Gasoline price increases under the current circumstances are especially frustrating to the public," Laskoski said. "A recession and rising unemployment translates into fewer motorists on the road and diminishing fuel consumption, and yet, retail prices climb higher."

The national average for a gallon of gas is about $1.92 per gallon for regular unleaded, up 13 cents per gallon over the last month. Average prices in Georgia remain lower than the national average.

On Monday, Georgians paid an average of $1.80 per gallon for regular unleaded, while metro Atlantans paid $1.79 for the same grade of fuel.

Gas prices typically rise following a rise in crude oil prices. Consumers are seeing retail prices now which are catching up with slightly higher crude oil prices experienced weeks ago.

In the coming weeks, refineries will begin their seasonal maintenance and begin producing summer blends of fuel.

"Pretty soon, winter will be over, and we'll be starting the driving season," said Neil Gamson, an economist for the EIA.

Gamson expects that as the economy further contracts, crude oil prices will settle into levels much lower than last year.

"We're not going to see $3" per gallon, he said. "These crude oil prices are fairly stable and fairly flat. Unless something unusual happens, we're not going to see prices go up much farther than they are right now."

Today, the EIA will release its monthly short-term energy outlook.