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Tue, Jun 10, 2008 - Page 10 News List

Gasoline reaches new US high of US$4 per gallon

PUMP SHOCKFuel prices are continuing to rise even though gasoline demand has fallen slightly in the US over the past month as motorists cut back on driving

AP , NEW YORK

New York resident Austin Rommett fills his scooter with fuel at a gas station in New York on Sunday. The average price of regular gas crept up to US$4 a gallon for the first time over the weekend, passing the once-unthinkable milestone just in time for the peak summer travel season.

PHOTO: AP

The average price of regular gas crept up to US$4 a gallon (3.8 liters) in the US for the first time over the weekend, passing the once-unthinkable milestone just in time for the peak summer travel season.

Prices at the pump are expected to keep climbing, especially after last week’s furious surge in oil prices, which neared US$140 a barrel in a record-shattering rally on Friday.

While Americans who have to drive will feel the biggest squeeze, the increased prices also translate into higher costs for consumers and businesses, who will be forced to shoulder increased transportation costs of food and anything else that needs to be transported.

Gas prices rolled past their latest threshold on Sunday, increasing to US$4.005 overnight from US$3.988 a gallon the day before, the American Automobile Association and the Oil Price Information Service said.

Of course, drivers in many parts of the country have already been paying well above that price for some time.

California has seen some of the highest prices; a gallon there now averages US$4.436, the most in the country.

Missourians are paying the least at the pump, with a gallon in the Show-Me State selling for a relatively cheap US$3.802.

Truckers and others with diesel engines under the hood have it even worse off. A gallon of diesel now sells for US$4.762, up nearly US$0.01 overnight. Prices hit a record atop US$4.79 at the end of last month.

Skyrocketing oil prices are largely to blame for the surge.

Soaring demand in Asia and elsewhere ensures global supplies remain tight even as Americans cut back; recent figures from the US Energy Department’s Energy Information Administration showed US gasoline demand actually fell 1.4 percent over the last four weeks.

Crude prices shot up more than 13 percent late last week in their biggest two-day price gain in history. Benchmark light, sweet crude for next month’s delivery officially finished the week at US$138.54 on the New York Mercantile Exchange, but at one point jumped as high as US$139.12.

The eye-popping prices are leading many motorists to rein in their gas consumption, either by cutting back on all but the most essential driving or looking anew at alternatives like public transportation.

Sales of gas-guzzling vans and sport-utility vehicles are down in the US, while those of fuel-efficient compacts and hybrids are on the rise.

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