Las Vegas, U.S. gasoline prices rise again

Monday, April 12, 2004 | 10:38 a.m.

SUN STAFF AND WIRE REPORTS

Las Vegas motorists are again paying record prices for gasoline.

The local average price for a gallon of regular unleaded gasoline this morning was $2.13, matching an all-time high reached Saturday, AAA Nevada said today.

The average price statewide also maintained record levels this morning at $2.11.

"Basically, prices leveled out three weeks ago and actually began trending down a few cents," said Sean Comey, a spokesman for AAA Nevada. "Last week, however, they began rising again."

Las Vegas gas prices were hovering around $2.09 on Thursday. On March 16, the local average was $2.10, up from $1.83 on February 17, AAA said.

"It is just, again, a situation where retailers are forced to pass on higher costs in order to maintain some margin of profit," said Peter Krueger, executive director of the Nevada Petroleum Marketers and Convenience Store Association. "There's really nothing new to report."

Krueger said the costs have been driven up as refiners switch over from a winter fuel blend -- designed to reduce smog-causing emissions -- to a summertime blend. He said the price drops of a week ago amounted to some retailers selling off the last of the winter blend at discounted prices. As that fuel is used up, prices are now climbing.

Some Southern California refineries have had operational problems, limiting supply and driving up prices, Krueger said.

The U.S. average retail price for self-serve gasoline rose about 2 1/2 cents in the past two weeks to almost $1.80 a gallon as of Friday, analyst Trilby Lundberg said, citing a survey of about 8,000 gas stations by her research firm in Camarillo, Calif.

That's an all-time high for the survey and a gain of 31 cents since late December caused by a combination of higher crude oil prices, strengthening gasoline demand, limited refinery capacity and environmental rules, she said.

If crude oil prices in New York stay above $37 a barrel, further increases in retail gasoline prices are likely, Lundberg said. Crude oil for May delivery on Thursday jumped 99 cents to $37.14 a barrel on the New York Mercantile Exchange, capping a gain of 8 percent for the week, which was shortened by a day because of the Good Friday holiday.

"Unless crude oil prices slip sometime soon, I doubt we will see declines in gasoline overall," Lundberg said.

Environmental regulations require additives such as ethanol to make fuel burn more completely, and they also have forced refiners to reduce the amounts of sulfur in gasoline. These requirements may be boosting refiners' costs by limiting their ability to move fuel between different markets and by eliminating some sources of imported fuel.

San Diego, where motorists were paying an average $2.22 a gallon, had the highest pump prices of any U.S. city last week, according to the survey. Tulsa, Okla., had the lowest average price at $1.59 a gallon.

Bloomberg News

contributed to this report.