Gas prices keep climbing as average hits $3.39 a gallon

By James R. Healey, USA TODAY
Oil set a record on Monday — and gasoline tried to.
The nationwide average for a gallon of regular was $3.389, the federal Energy Information Administration reported. That's the highest actual price the EIA has recorded, but still short of the $3.413 that would match the record after adjusting for inflation. That is $1.417 in March 1981.


GOING PREMIUM: More cars are using pricier premium gas

Oil, already at all-time highs, closed Nymex trading Monday at a record $111.76 a barrel, up $1.62 from the Friday close.

"At this point, there's not much reason for prices to come back down," says Peter Beutel, president of energy consultant Cameron Hanover. "Everything's saying it's going to go higher."

Oil rose on a weak dollar and short-term supply worries caused by sabotage in Nigeria and problems on a Midwest pipeline. It ignored short-term forecasts of less U.S. demand and long-term news of what may be the world's third-biggest oil deposit, in deep water hundreds of miles off Brazil. That would take years to develop.

Diesel — the fuel of the semis, locomotives and local delivery trucks that tote goods to keep the U.S. economy going — averaged $4.059. That was up 10.4 cents in a week and $1.182 more than a year ago. It's the first EIA report showing diesel averaging $4 or more. The previous record was $3.989 March 24.

Diesel, like gasoline, skyrocketed in 1981, but even adjusted for inflation, today's price is at least $1 higher.

The EIA's Monday survey showed that the gasoline average jumped 5.7 cents in the past week. If that pace continues, the average would pierce the inflation-adjusted high by the weekend. Monday's price was up 51.7 cents from a year ago.

The government's most recent short-term energy forecast, published last week, foresees a monthly average as high as $3.60 this spring, and cautions: "It is possible that prices at some point will cross the $4-per-gallon threshold."

Some West Coast stations are above $4 for regular, but the only local U.S. average that high is Wailuku, Hawaii, at $4.072, according to a daily price report by the Oil Price Information Service and AAA.