Gas price to climb by spring

News Tribune Staff and News Services; The News Tribune


Even if war is averted in Iraq, South Sound motorists should be ready to pay as much as a dime a gallon more for gasoline this spring.

And that doesn't take into account a possible war.

An Energy Department report Thursday forecast that because of rising crude prices and the disruption to oil exports in Venezuela, gasoline prices nationwide would increase an average of 10 cents a gallon by mid-spring.

On Thursday, the average price for regular gasoline in Tacoma was $1.28, according to AAA.

Gas prices across the rest of the country are currently averaging around $1.44 a gallon.

Oil and gasoline imports from Venezuela probably won't return to normal before summer - if then.

Despite tight supplies of crude, the Bush administration gave no sign Thursday that it was ready to use emergency oil reserves to soften the supply or price impacts, although U.S. officials were lobbying foreign producers to increase oil output.

"There's no change in the decisions that have been made," White House press secretary Ari Fleischer said when asked whether the government's Strategic Petroleum Reserve might be tapped. He said the purpose of the reserve was to respond to emergencies and implied that no such situation exists.

The Energy Information Administration report said Venezuelan production almost certainly will continue to be below normal levels into late spring and into the summer driving season, even if the country's political crisis is resolved in the next few months.

It would most likely take four months to return to full production after the turmoil subsides, the analysis said.

Last year, Venezuela shipped about 1.5 million barrels a day of crude and refined gasoline into the United States, about 13 percent of U.S. imports. Its refineries, now largely shut down, also are a major source of U.S. gasoline imports.

The EIA projections do not take into account the turmoil over Iraq and assume that oil from that country will continue to be available at about 2.4 million barrels a day. If war erupts in Iraq, all bets are off on predicting prices, said EIA petroleum analyst David Costello.

Last year, Iraq produced about 2 million barrels a day on average. Economists and energy experts have said serious worldwide crude shortages could develop if war erupts in Iraq and the country's imports disappear while Venezuela's oil fields remain crippled.

EIA director Guy Caruso said that "a positive sign" is that gasoline inventories at this time are on the high end of the comfort range and "in reasonably good shape."

The Associated Press and Bloomberg News contributed to this report.


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