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Gas prices surge
Survey: Higher crude, new environment rules send pump prices up nearly 7 cents a gallon.
February 29, 2004: 4:17 PM EST

ATLANTA (CNN) - The average U.S. price of gasoline jumped nearly 7 cents per gallon over the past two weeks, the result of higher prices for crude oil and the cost to refiners of meeting new environmental regulations, a survey said Sunday.

California experienced the biggest rise, with a 28-cent increase in the price paid by Los Angeles drivers for a gallon of regular unleaded gasoline sold at self-serve pumps, according to the Lundberg Survey.

Lundberg found the national average price per gallon of self-serve regular gasoline was $1.72, a 6.9-cent increase since Feb. 13.

San Diego drivers paid the most, with a gallon of self-serve regular costing them an average $2.19. In Los Angeles, a gallon averaged $2.15 cents.

The Lundberg Survey found nine U.S. cities with average prices above $2. Two weeks ago, Honolulu drivers paid the most, at $1.99 per gallon.

The survey of about 7,000 filling stations found drivers in Cheyenne, Wyo., paid the least -- an average $1.49 per gallon, Publisher Trilby Lundberg said.

Lundberg said gas prices have risen 25 cents per gallon since late December as the price of oil has increased and a recovering U.S. economy has boosted demand.

The Organization of Petroleum Exporting Countries announced three weeks ago that it will cut production by 1 million barrels per day -- about 4 percent -- starting April 1. But oil ministers say that decision could be changed when OPEC meets March 31.

Crude oil was selling for more than $36 per barrel on Feb. 27, the day of the latest survey, Lundberg said.

Also exerting an upward pressure on prices is the fact that refiners have been required since Jan. 1 to reduce the amount of sulfur in the gasoline they produce. And three states -- New York, California and Connecticut -- have required that the additive MTBE -- methyl tertiary butyl ether -- be replaced with more expensive ethanol to reduce pollutants.

The Environmental Protection Agency warned last fall that MTBE -- deemed a potential human carcinogen at high doses -- is present in groundwater.

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Refinery repairs and maintenance have taken some supply off the market, as refiners prepare to maximize gasoline production during spring and summer, when demand is historically highest.

Prices were up in all regions, but California's refinery regulations are the most demanding and costly.

Here are some other prices: Hartford, Conn.: $1.74; St. Louis: $1.71; Miami: $1.70; Pittsburgh: $1.65; Dallas: $1.58; Atlanta: $1.55; Charleston, S.C.: $1.54; Denver: $1.53.  Top of page

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