Gas Prices Up 20 Cents In 3 Weeks

Average Now $2.53, And Likely To Keep Rising Until Labor Day

(CBS/AP)  Retail gas prices hit another record high over the past three weeks, mirroring a rapid increase in the cost of crude oil, according to a nationwide survey released Sunday.

The average price for all three grades rose nearly 20 cents to $2.53 in the three weeks ending Aug. 12, said Trilby Lundberg, who publishes the semimonthly Lundberg Survey of 7,000 gas stations around the country. The figures were not adjusted for inflation.

In the same three-week period, crude oil price futures rose about $8.21. A barrel of oil produces about 42 gallons of gasoline, resulting in a price increase of 19.6 cents per gallon — nearly identical to the 19.8 cent rise in the price of gas at the pumps, Lundberg said.

However, Lundberg did have some good news.

"Because August ends our summer driving season, gasoline demand goes down after this month. That will take pressure off gasoline," she told CBS Radio News.

And this may be the peak of the price rise.

"There are reasons to suppose that crude oil prices will be comparatively stable, now and in coming months," Lundberg said.

But oil analyst Tom Kloza of the Oil Price Information Service sees another month or so of pain at the pump.

"Whether the fundamentals justify it or not, there's a lot of money going into the oil business, a lot of money going into investing and we'll probably run up for another 30 or 40 days here," Kloza said on CBS News' The Early Show. "We've got about five or ten or 15 cents a gallon just to catch up with what has happened in the global market."

Kloza expects big price drops, though, to start around Columbus Day.

Retail prices have risen an average of 70 cents since the beginning of the year and are up 62.7 cents from last August, Lundberg said.

Still, adjusted for inflation, prices have yet to climb to the record levels reached in the 1980s.

Gas prices in March 1981 would be $3.03 per gallon expressed in today's dollars, Lundberg said, while a barrel of oil would be about $90.

It's not just gasoline, but also diesel fuel and jet fuel, said Kloza, and that's affecting the economy.

"Anyone that thinks these prices don't have consequences really needs to rethink that," he told Early Show co-anchor Hannah Storm.

Wal-Mart registered slower than expected sales this spring, blaming higher oil prices, reports CBS News Correspondent Tony Guida, and airlines recently raised ticket prices for the eighth time this year.

The rising prices have helped boost profits at oil companies. Chevron Corp.'s $18 billion acquisition of oil and gas company Unocal Corp. on Wednesday was predicated on the expectation that the price of crude oil would remain high or climb further, analysts said.

"I'm feeling it," said driver Adolfo Fernandez, a Los Angeles resident who was filling his BMW Sunday with premium unleaded at a cost of $2.97 per gallon. "I feel sorry for the people who really feel it and can't afford it."

"The prices are so ridiculous," added Danny Derosas of Los Angeles. "Everything you work for goes into gas."

According to the survey, self-serve regular averaged $2.50 a gallon nationwide. Midgrade was pegged at $2.59, with premium-grade was at $2.69.

Among the stations included in the survey, the highest price for unleaded regular was in San Diego at $2.76. The best deal was in Cheyenne, Wyo., at $2.31 a gallon.

In California, self-serve regular averaged $2.71 a gallon.