US gasoline prices hit record $3.79/gallon

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The average retail price of a gallon of regular grade gasoline in the US rose to a new record high as the cost of a barrel of crude oil price continued its ascent, an industry analyst said.

The US average retail regular gasoline price rose to $3.7929 a gallon on May 16, up nearly 17 cents in the past two weeks, according to the nationwide Lundberg survey of about 7,000 gas stations.

In two areas - Chicago and New York's Long Island - prices soared to an average of more than $4 a gallon for the first time, survey editor Trilby Lundberg said.

The gasoline price could rise to $4 a gallon on a national average basis, she forecast. “The refinery margin on gasoline is so poor, I think the upward pressure on the refining margin will push up the price at the pump, even if crude oil does not,” she said in an interview.

Refiners, who process crude oil to make gasoline, have been battered by slim margins for the past six months as they have struggled to pass on record crude oil prices to consumers. Some have mothballed refineries in response to the weak margins.

Crude oil prices have risen to records this year, keeping gasoline prices high. US crude settled above $126 a barrel for the first time on Friday. On the New York Mercantile Exchange, June crude closed up $2.17 at $126.29 a barrel.

“Gasoline demand will rise seasonally during June, July and August as the warmer, more benign weather makes it safer and more inviting for driving,” Lundberg said. “We will be consuming all that domestic refiners can produce and what we cannot we will be importing from other countries during summer demand.”

Lundberg said the national average of $3.7929 was a new all-time record high both in today's dollars and on an inflation-adjusted basis.

At $4.0675 a gallon, Chicago had the highest average price for retail gasoline in the survey, which focuses on metropolitan areas. Long Island had the second highest, with $4.0091. The lowest price was $3.4824 a gallon in Tucson, Arizona. (Reuters)

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