Energy Department predicts higher gas prices

Wednesday, March 7, 2012
By Paul Martin

By Nancy Rivera Brooks
March 6, 2012

Gas prices began rising around Labor Day and motorists have seen little relief since. Now, the Energy Department has boosted its pump-price predictions for the peak driving season, defined as April through September, and for the full year.

Peak prices will average $3.925 for a gallon of regular gasoline in the peak driving season, 5.7% higher than during last year’s peak season and up from February’s forecast of $3.62 during the peak months, according to the agency’s monthly Short-term Energy Outlook. The high is projected to be $3.96 in May.

If national prices average just south of $4 a gallon during the peak season, then there will be times when the U.S. average probably will exceed $4. And California drivers can expect to pay a lot more because of the state’s cleaner-burning type of gasoline.

As to the question of whether U.S. prices will reach $5 a gallon, as some analysts have predicted, the Energy Department says maybe: Based on current prices of gasoline futures contracts, there’s a 2% chance that the average U.S. gasoline price will hit $5 a gallon for all of June. The agency put the probability of getting $4 gas in June at 39%.

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