Cost of gasoline expected to jump

Production cuts, maintenance cited

By: Fran Daniel | JOURNAL REPORTER
Published: March 04, 2010

Gasoline prices likely will be higher this summer than last summer, partly because of a reduction in gas production at refineries, the AAA Carolinas travel club said yesterday.

Already, the price of gas is 79 cents higher than it was at this time last year, when it was less than $2 a gallon.

In 2009, the average price of a gallon of unleaded gas in North Carolina was $1.89 on March 3, and it peaked at $2.65 June 20. In the Triad, the price of gas rose 79 cents from March 3 through June 20 last year.

Yesterday, the state average price was $2.68, up 3 cents from a week ago. The price of gas was $2.65 yesterday in the Triad.

"Conditions are not dramatically different from last year, so we can expect a rise in gas prices in upcoming weeks," said David E. Parsons, the president and chief executive of AAA Carolinas. "North Carolina motorists should be prepared for gasoline prices to climb upward significantly as we approach the summer travel season."

Several factors affected the price at the pump during the spike last year, including increasing demand in China, the world's second-largest consumer of oil. And in the United States, high unemployment and problems in the banking industry led to a weaker dollar, prompting greater investment in oil commodities.

Though gas prices increased last summer, they didn't do so as dramatically as in 2008, when the price of a gallon of gas soared above $4. AAA Carolina predicts a rise in gas prices this spring but expects the increase to be less dramatic than in past years, barring any unforeseen circumstances.

Brendan Byrnes, a spokesman for AAA Carolinas, said that the biggest factor for increases in gas prices this year will be the routine maintenance at refineries.

Some refineries in the country have temporarily closed production for maintenance because consumer demand is down.

"I think we will feel the rise in gas prices due to that spring maintenance and the switching over to the summer blends at refineries," Byrnes said.

fdaniel@wsjournal.com

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