Gas Prices Hit $3 On North Korea News

Regular unleaded gas reached $3.029 at a pump in Philadelphia on Friday, April 21, 2006. AP Photo

U.S. gas prices jumped nearly 11 cents per gallon in the past two weeks with the national average for self-serve regular just shy of $3 a gallon, and a major factor was the launch of long-range missiles by a country that doesn't produce or export oil.

The average price for the grade was $2.995 per gallon Friday, up 10.73 cents in two weeks, according to the Lundberg Survey of 7,000 gas stations across the country. The price was less than 2 cents below the all-time high of $3.01 set Sept. 9, analyst Trilby Lundberg said.

"Self-serve regular has now reached, for the second time in history, $3 per gallon nationwide, she told CBS Radio News.

The average mid-grade price was $3.10 a gallon while premium ran $3.20.

The lowest price for gas was $2.70 a gallon in Charleston, S.C., while the highest — $3.27 a gallon — was in Honolulu. The highest in the continental U.S. was $3.26 in San Diego.

"This is crude oil at work more than any other factor," said Lundberg. "There's been a fresh upsurge in the price of crude because of even greater geopolitical tensions about the world oil market."

"That's where the real big uncertainty comes: What will Iran do now with its nuclear program if we don't take some drastic action with North Korea," Brad Proctor, of GasPriceWatch.com, told CBS Radio News.

Proctor attributes the high prices directly to North Korea's missile launch July 4.

"The jump actually occurred July 5. We saw this huge jump in 24 hours that was directly in response to the markets opening and looking what happened with Korea," Proctor said. "We had a 13-cent rise in 24 hours of the wholesale price for gasoline, and that was immediately passed on, because that's a cost that they're going to have to buy future gasoline at."

Lundberg doesn't see prices coming down any time soon.

"The chances of their falling any time soon seems very weak. We do however have gasoline demand no longer growing because of these high prices and that helps supply," and she doesn't expect prices to rise further — "unless there's an oil supply emergency."

Proctor agrees.

"Once we see a price level like this maintained, and the public doesn't change its buying habits, typically we do see a plateau occurred and it continues to stay at that," he said.

However, Lake Coeur d'Alene boat operator Rob Garrett tells that high gas prices have turned a lot of yachts into floating hotels.

"You kind of use them like a second hotel, leave 'em in the slips, live on them for the weekend, use 'em that way," he said.

Boat owner Don Sargent isn't having as much fun as he used to.

"We sit at the dock a lot more, and then we go out and just sit in the middle sometimes, rather than drive as much as used to," Sargent said.

Dee Smith's recently purchased 36-foot yacht may sit at its dock after it is restored, "because I don't think we're going to be able to afford fuel for it."

But Smith doesn't regret the purchase.

"No, not at all. We've decided we now have a cabin on the lake," Smith said.
  • Lloyd Vries

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