EIA Raises Forecast for Summer Gasoline Prices

Regular-grade gasoline in the United States is expected to average at a record $3.66 a gallon this summer but peak at $3.73 per gallon in June, the Energy Information Administration said Tuesday.

Gas station in San Francisco.

Last month, the EIA projected that gasoline prices for the peak summer period from April to September would average $3.62.

For all of 2008, pump prices are expected to average $3.52 per gallon this year, or 71 cents above the annual average price in 2007.

"These projections reflect our assumption of a sizable narrowing of refiner gasoline margins from last year, attributable to weakness in gasoline demand and growth in ethanol supply," the EIA said in its latest monthly outlook.

The national price for regular, self-service gasoline last week hit a new record of $3.61 a gallon, up 56 cents from a year ago because of crude oil prices rallying to record highs.

In 2009, regular-grade gasoline retail prices are projected to average $3.44 per gallon, 20 cents higher than in last month's outlook.

Diesel prices this year are to average $3.94 per gallon, up from $2.88 per gallon last year.

"This reflects global strength in diesel demand that is contributing to a widening of the margin between diesel prices and crude oil costs since last year.