Gasoline and Diesel Prices Set Records

Since January 2004, gasoline and diesel prices have risen dramatically. During the spring, new price records were established across the state for both fuels. Prices for gasoline are averaging about 50 cents a gallon higher this year than last. Diesel prices are up about 30 cents a gallon over last year. Economists estimate that a penny increase at the pump costs Americans $1 billion a year more. In response to the price rise, Governor Johanns asked the Energy Office to increase the monitor prices and supplies across the state and to make that information available to the public on the agency's web site. The latest price and supply information is available at http://www.nol.org/home/NEO/supply_status/latest_status.htm

The Attorney General's office asked Nebraskans who suspect gasoline stations of manipulating prices to report that information to the Office of Consumer Protection at 1-800-727-6432.

The state's farmers will be paying a lot more to raise corn and soybeans this year because of increases in electricity and diesel fuel prices. According to a University of Nebraska extension educator in south central Nebraska, irrigation costs could rise to about $90 an acre this year, compared to $70 an acre last year.

Three main factors were cited for this spring's price rise: a rise in the price of a barrel of oil, increasing demand for petroleum products, especially in the United States and China, and the inability of refiners to keep up with demand.

There are 149 refineries in the nation in 33 states - none are in Nebraska - with a capacity of 16.8 million barrels a day according to the National Petroleum Refiners Association. In 1981, there were 321 refineries with a capacity of 18.6 million barrels a day.

According to the Energy Information Administration, the price of a gallon of gasoline is comprised of four components: crude oil, 46 percent; taxes, 24 percent; refining, 19 percent; and distribution and marketing, 11 percent. Currently, U.S. gasoline demand averages 9 million barrels a day, with domestic refineries supplying 90 percent of the fuel.

Looking Ahead
The Oil and Price Information Service speculated that prices could remain high and volatile throughout the summer driving period with price spikes around the Fourth of July and Labor Day holidays. However, by Thanksgiving gasoline prices should fall to around $1.60 a gallon. The Service cautioned that forecasting prices is difficult since events overseas can affect retail prices. Any one of a number of events — locally or internationally — could cause a rise in prices:

  • Pipeline leaks and refinery fires or unplanned shutdowns
  • A strike by workers, especially in Venezuela or Nigeria
  • Political upheavals or attacks on oil facilities.
Experts said the factors that caused this year's price increase won't be going away anytime soon. In the latest monthly forecast, the U.S. Department of Energy predicted the national price for regular unleaded gasoline will average $1.89 a gallon from July through September. For the period April through September, the agency predicted a national price average of $1.94, 35 cents a gallon higher than last year.

A Nebraska Option
One way for Nebraskans to save at the pump, is to fuel up with gasoline blended with 10 percent ethanol. Typically, the blended fuel is several cents a gallon cheaper, and you're buying a fuel made in the state or surrounding states.
For More Information:
   Home    Energy Loans    Energy Statistics        State of Nebraska Home    Disclaimer    Webmaster