In the news:
Higher gas prices mean summer driving to cost 6% more
Peak-season prices will average $3.95 for a gallon of regular gasoline, up 6.3 percent, or 24 cents, from last year's April-September driving season, according to the U.S. Energy Department's monthly Short-Term Energy Outlook.
Los Angeles Times
Gas-price outlookFOR THE YEAR, here are the government's forecasts for average energy prices:
U.S. Energy Department
LOS ANGELES — Although gas prices have been easing lately in some regions, the Energy Department has predicted that U.S. motorists will be shelling out an average of 24 cents a gallon more for gasoline during the peak summer driving season, defined as April through September.
Peak prices will average $3.95 for a gallon of regular gasoline, up 6.3 percent, or 24 cents, from last year's April-September driving season, according to the agency's monthly Short-Term Energy Outlook. That represents an increase from last month's peak-season prediction of a $3.295 average.
The highest monthly average is expected to be $4.01 in May, the agency said, putting the chance of a $4 average in June at 40 percent.
Gasoline prices will vary widely by region, with the West Coast leading the way at an average of $4.20 for the peak season.
Gasoline prices have been rising primarily because crude-oil prices are up, but refinery closures in the Northeast are contributing, the Energy Department said.
All of this pump-price pain is expected to reduce gasoline consumption by 0.5 percent this summer compared with last summer, according to the forecast.
For the year, gasoline is projected to average $3.87 a gallon, implying an average annual household expenditure of $3,410, up $250 from 2011, the Energy Department said.
But one analyst thinks gasoline prices may have already peaked in late March.
According to Trilby Lundberg, president of Lundberg Survey, which checks with about 2,500 filling stations, "Price hikes at the pump have been losing steam for weeks," because of falling crude-oil prices.
Crude oil for May delivery fell $1.25, or 1.2 percent, to $101.21 a barrel at Tuesday's close. Futures touched $100.75, the lowest intraday level since Feb. 15, as upcoming talks between Iran and United Nations Security Council members eased fears of a supply disruption.
The average price of regular unleaded gasoline in the U.S. on Tuesday was $3.92 a gallon, according to AAA. It was 18 cents higher than a year ago and up 65 cents since Jan. 1, according to AAA.
For the Seattle-Bellevue-Everett region, regular gas averages were $4.17 a gallon Tuesday.
Prices posted on station signs on street corners across America have both a financial and psychological effect on drivers, experts say.
Already, high prices have led to strong sales of gas-sipping vehicles like the Toyota Prius, and they've become a major issue in the presidential campaign.
Further price hikes will affect the kind of vacations Americans take, and will likely impact how they feel about the economy. They may even influence how Americans vote in November.
"People are going to notice" if the national average crosses $4, said Fred Rozell, retail pricing director at Oil Price Information Service. "Anytime the price goes up, it's going to affect things."
The government said there's a small chance the price could climb as high as $4.50 a gallon in June.
Americans have responded to high prices by using less gasoline.
That should continue over the summer, the government says. But energy forecasters still expect households to spend an average of $3,410 for gas this year, up $250 from last year.
The tourism industry pays close attention to gasoline prices during the summer since it has such a big impact on the industry's bottom line.
Anne Banas, executive editor of the travel website SmarterTravel.com, said higher gas prices might force travelers to stay at cheaper hotels this summer. They also may decide to cut their trips short. But most won't stay home.
"People will still travel for summer vacation and still perceive a driving vacation as cheaper than flying," Banas said.
The government made a number of other predictions in its report:
• Refineries will produce less gasoline and other fuels this summer. The decline of about 0.6 percent is due partly to closures of three refineries that feed East Coast markets.
• Diesel prices should be 27 cents per gallon higher during the summer driving season at an average of $4.21 per gallon. Prices could peak at a monthly average of $4.25 per gallon in the middle of the driving season.
The Energy Information Administration included its summer forecast as part of its monthly outlook.
Material from Bloomberg News and The Associated Press is included in this report.