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Gasoline prices surge easing, government says.

WASHINGTON — For two straight summers, motorists have seen gasoline prices soar past the $3-a-gallon mark nationwide.
    And with prices at the pump going up steadily over the last two months to $2.80 a gallon last week, it seemed another such summer may be just ahead.
    Maybe not.
    The Energy Department said Tuesday in its summer fuel forecast that the recent sharp increase in gasoline prices is likely to ease off. And, it said, motorists can expect to find gasoline a few pennies cheaper this summer than last.
    Not that the fuel’s going to be cheap.
    The department said prices from the April through September period, including the busiest vacation travel months, should average $2.81 a gallon for regular grades nationwide. There will be regional differences and the West Coast always has higher prices.
    But you may not want to wage a bet on that number.
    Only a month ago, the government said it believed the cost of regular-grade gasoline would peak with a monthly average of $2.67 a gallon in June, a price already eclipsed last week when motorists paid on average $2.80 a gallon.
    The latest forecast calls for prices to peak with an average $2.87 a gallon for the month of May and then decline. Last summer’s peak was an average of $2.98 for the month of July.
    ‘‘We think the forecast is about on track,’’ said Geoff Sundstrom, a spokesman for AAA. He said based on current market trends he doesn’t see another summer with $3 gasoline across the country.
    Prices have soared beyond $3 in each of the last two summers: During Hurricane Katrina in 2005 when the storm disrupted Gulf Coast supplies and last July when the Israeli invasion of Lebanon caused crude prices to spike to $76 a barrel with $3-plus gasoline quick to follow.
    The government report assumes no new international crisis or major Gulf Coast storm this summer.
    Since January, the price of regular grade gasoline has gone from a weekly average of $2.16 a gallon to $2.80, a 64-cent increase. Prices across much of the West Coast have been over $3 a gallon.
    Gasoline prices normally increase in advance of the heavy summer driving season, but this time the price climb came shockingly early in the dead of winter.
    The department attributed the unusual early price surge to higher crude oil prices, unplanned refinery outages, declining imports from Europe and an increase in demand.
    ‘‘Although gasoline prices began their seasonal increase about a month earlier than usual, the rapid rate of price increase is projected to slow over the next few months,’’ said the report.
    The report said motorists are expected to use nearly 400 million gallons of gasoline during April-September, a 1.2 percent increase over the same months last year.
    ‘‘Demand for fuel is strong. We’ve not seen a reduction in fuel use,’’ agreed Sundstrom. Nor have there been gasoline shortages as imports make up the shortfall in domestic refinery output.
    The automobile association won’t make its formal prediction of summer travel until next month. But Sundstrom said it appears that people seem to be adapting to the higher prices.
    ‘‘One has to ponder if $3 a gallon is the new threshold to pain,’’ said Sundstrom.
    That may be the case among many vacationers, according to a survey of 2,518 owners of RVs, travel trailers, boats and motorcycles by Nationwide Mutual Insurance Co.
    Nearly seven out of ten of the survey’s respondents ‘‘say they will not change their vacation plans because of high (fuel) prices,’’ according to the Columbus, Ohio-based insurer.
    The government report said it expects crude oil prices to average $65 a barrel over the summer because of ‘‘tight oil markets and continued international uncertainty’’ including tensions involving Iran.
    Crude oil for May delivery rose 38 cents Tuesday to settle at $61.89 on the New York Mercantile Exchange after sliding nearly $3 on Monday.
    Meanwhile, high gasoline costs — and an anticipation of large profit figures from major oil companies — has already spurred talk in Congress about price gouging.
    Legislation sponsored by 86 House members would establish the first federal law against price gouging and impose criminal penalties and fines of up to $150 million for companies and $2 million on individuals.
    The American Council for Capital Formation, a business advocacy group, said this week the law would cause gasoline shortages as retailers chose to shut down instead of risking prosecution whenever prices spike sharply.
    Rep. Bart Stupak, D-Mich., a principal sponsor of the bill, promised to continue to push for the legislation and said Tuesday he was not surprised at the criticism from an organization that ‘‘receives hundreds of thousands of dollars from Big Oil.’’
    The Energy Department also:
    —Said ethanol production as an additive to gasoline is expected to average 399,000 barrels a day this summer, an increase of nearly 28 percent from last summer as more plants opened to produce the gasoline substitute.
    —A colder-than-normal first quarter has set the stage for more natural gas use this year with prices likely to average $7.83 per thousand cubic feet, about 13 percent more than last summer.
    ———
    On the Net:
    Energy Information Administration: www.eia.doe.gov

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