Gasoline on way to $1.50
Gasoline prices are up sharply, and there are some spot shortages in the Southeast, says the American Automobile Association (AAA). The AAA's survey of some 5,800 gasoline stations nationwide shows that, from Dec. 19 to Jan. 18, the average price of all grades of gasoline increased 6.1 cents a gallon.
"This is the largest increase for a four-week period since last summer," declared AAA spokesman Hank Downey.
Industry sources forecast that the price of gasoline will reach $1.50 a gallon by the end of 1980.
The AAA says the average price of unleaded gasoline sold at a full-service station is $1.14 a gallon. Full- service regular is $1.10 a gallon.
Oil industry analysts say most of these price increases stem from the recent spate of wholesale price increases by many of the major oil companies. Shell Oil Company, for instance, has raised its average wholesale price 6 cents in the past several weeks because of increased refinery and crude oil costs.
Exxon, meanwhile, has raised the wholesale price of all grades of gasoline by 15 cents a gallon since Dec. 18.
These and other increases have prompted Daniel Lundberg, publisher of the Lundberg Letter, a respected oil industry newsletter, to forecast that gasoline almost certainly will hit $1.50 a gallon by the end of the year.
A spokesman for one major US oil refiner, who requested that both his name and the name of his company be withheld, said company analysts who believe that gasoline will go up at least "30 cents a gallon this year and 40 more next year."
These projections, the source stressed, were based on the strong possibility of further OPEC increases, higher refinery costs, and other "normal" inflationary factors. Unforeseen circumstances, such as a new supply pinch in the Mideast, could send gasoline prices much higher, he added.
The president of a major oil company, citing the still- precarious Mideast situation and the likelihood of more OPEC price hikes, told reporters privately in New York that $2-a-gallon gasoline by December could not be ruled out.
Richard Curry, AAA energy specialist, believes "recent [Mideast] crisis talk" could mean "a whole new ball game" in gas prices.