Oil and Gas

Ukraine, ethanol spur 10-cent jump in US gasoline prices: Lundberg


U.S. drivers are paying nearly 10 cents more per gallon at the pump than they did two weeks ago, as worries about Ukraine contributed to a jump in the cost of ethanol used in making gasoline, according to a survey released on Sunday.

The Lundberg survey said the national average price of self-serve, regular-grade gasoline was $3.5098 per gallon on March 7, up 9.87 cents from two weeks earlier, and up 21.54 cents, or 6.5 percent, in just the last four weeks.

Diesel fuel prices also rose, increasing by 2.58 cents from two weeks earlier to an average $4.0323 per gallon.

(Read more: Why US can export nat gas without raising prices)

But U.S. consumers are paying about 23 cents less for a gallon of gasoline than a year ago, when it cost $3.7394.

James Brey | E+ | Getty Images

The Lundberg survey of about 2,500 gas stations comes out every second or third week.

Trilby Lundberg, who conducts the survey, said recent increases in ethanol prices affected pump prices because ethanol is blended into gasoline.

She said the uncertainty over Ukraine's future also factors into this because "Ukraine is a major corn exporter and nearly all ethanol in the United States is made from corn."

Also contributing to higher gas prices were improved profit margins for retailers and refiners, she said.

(Read more: Russia: Sanctions will 'boomerang')

Prices may rise "a few more pennies" in the near term, she said, but unless crude oil prices surge or the Ukraine situation worsens significantly, they likely will not head much higher before April or May, when more-costly summer-blend gasoline enters the market ahead of the peak driving season.

She also said this weekend's start of daylight saving time in the United States and Canada could increase demand, and as a result, prices for gas because it gives people an extra hour after work to use their cars and trucks for errands.

Brent crude prices closed Friday at $109.00 a barrel, while U.S. crude futures settled at $102.58.

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According to the Lundberg survey, the lowest average price for a gallon of unleaded gas in the 48 contiguous U.S. states is $3.18 in Jackson, Mississippi, and the highest price is $3.94 in Los Angeles.

The survey is done in Camarillo, Calif.

By Reuters