US Gas Prices Increase

NEW YORK, Mar 23, 2003; Reuters reported that U.S. average retail gasoline prices increased less than one cent per gallon over the last two weeks on diminishing fears that war in Iraq would disrupt Middle East oil supplies, according to a nationwide survey released on Sunday.

The national average for self-serve regular unleaded gas rose seven-tenths of one cent to $1.7282 per gallon in the two weeks since March 7, according to the Lundberg survey of 8,000 gas stations.

"Prices have risen more than 25 cents a gallon this year, but it all changed on March 17, when President Bush gave his 48-hour ultimatum to Iraq's President Saddam Hussein," said Trilby Lundberg, editor of the survey.

"The reason for high prices had been supply concerns. Since March 17, oil prices reflect a higher market confidence that supplies will not be affected," Lundberg added.

The most expensive gasoline was found in San Diego at $2.18 a gallon, while the cheapest was found in Tulsa, Oklahoma, at $1.48 a gallon, according to the survey.

California consumers can expect to pay even more as the wholesale price for the state's new gasoline blend -- made with corn-based ethanol -- has shot up in recent trading on the spot market.

Crude oil futures are down about 33 percent from 12-year highs reached last month as dealers have bet on a swift victory for U.S. forces in Iraq without significant disruptions to oil flows from the energy-rich Middle East.

The cheaper crude may signal lower pump prices in the coming weeks, by reducing the cost of fuel production.