Business

Government boosts forecast for pump prices

Posted February 12, 2013 3:59 p.m. EST
Updated February 13, 2013 5:32 a.m. EST

— First it was a tax hike. Now consumers are looking at a higher than expected gasoline bill for 2013.

The federal government on Tuesday boosted its forecast for gasoline prices this year by 11 cents to an average of $3.55 a gallon. That would be the second-highest annual average ever, behind last year's $3.63 a gallon.

For a Durham trucking company, the high fuel prices are a heavy load.

"You get roughly, on average, around 6 miles a gallon," said Tucker Cowlbeck, terminal manager for Brown Trucking Company, which has a fleet of 110 trucks that each carry up to 200 gallons of gas.

"(Gas prices have) a key impact to the bottom line," he said, adding that the costs eventually have to be passed on to consumers.

AAA Carolinas said gas has gone up 16 cents across North Carolina in the past month, and currently sits at an average of $3.45.

The government's revised forecast follows a more than 10 percent increase in gas prices since the middle of December. The Energy Information Administration, the statistical arm of the Energy Department, says the average gas price jumped from $3.25 on Dec. 17 to $3.61 Monday.

In its monthly Short-Term Energy Outlook, the EIA primarily pins the increase on higher oil prices. Brent crude, the benchmark for many international varieties of oil imported to the U.S., rose from $109 a barrel in mid-December to about $119 in early February.

That $10 increase equates to about 24 cents per gallon of gas, the EIA says. U.S. benchmark crude rose $8 a barrel, to nearly $96 in the same time frame.

Consumers are already feeling a pinch from higher taxes. The expiration of last year's payroll tax reduction will cost an extra $579 for households making $40,000 to $50,000 in 2013, according to the Tax Policy Center, a non-partisan Washington research group.

Still, there is some good news: The government expects oil prices to drop because of increased production in countries outside of the Organization of the Petroleum Exporting Countries. For instance, crude oil production in the U.S. is expected to grow 13 percent to 7.25 million barrels a day this year.

As a result, the government says, gas should peak at an average $3.73 a gallon in May, 21 cents below last year's high of $3.94 in early April.