Record gas prices: Day 8

Average gas price nears $3.18 a gallon for the first time in Sunday's reading, to reach eighth straight record high; gas under $3 tough to find.

By Chris Isidore, CNNMoney.com senior writer

NEW YORK (CNNMoney.com) -- Gasoline prices hit their record high for the eighth straight day Sunday, and there are now only a few states left where the average price hasn't crossed the $3 threshold.

The motorist group AAA said the average price for a gallon of self-serve unleaded hit $3.178 in its latest reading, based on a daily survey of up to 85,000 gas stations. That's up from Saturday's record of $3.157.

The nation's retailers say soaring gas prices are prompting U.S. consumers to cut back on their purchases and shopping trips.
The nation's retailers say soaring gas prices are prompting U.S. consumers to cut back on their purchases and shopping trips.

The group warned in congressional testimony this week it believes that more record prices could be on the way. It's forecasting prices will approach $3.25 a gallon over the next 60 days.

Prices are now up 3.7 percent over the first in the string of record prices that were set a week ago. They've risen 11 percent over the last month.

Topping post-Katrina records

Before this week's series of record-high gas prices, the highest price ever recorded in the survey was $3.057, which was set Sept. 4 and Sept. 5, 2005, in the wake of Hurricane Katrina, which disrupted refinery operations and pipelines and caused a temporary spike in prices. The only other time that the AAA national average has topped the $3 mark was in August 2006, after Israel invaded Lebanon and oil futures shot higher. Gas prices topped out at $3.036 in that spike.

But problems in gasoline supplies and refinery output sent the average gas price above the $3 a gallon mark on May 4, and it's been climbing relatively steadily since. On Sunday, May 13, it set a new record, reaching $3.0637, and it's been up from there each day since.

California had the highest average price, with a gallon of self-serve unleaded costing $3.453, although that price is down slightly from $3.457 on Saturday.

New Jersey remained ahead of South Carolina in the race to have the cheapest average gas price, coming in $2.93 a gallon compared to South Carolina's average of $2.968 a gallon. But both prices were up from Saturday's reading, and the two states are joined by New Hampshire at $2.986 as the only places where the average price is below $3 a gallon.

Four more states - Alabama, Mississippi, Tennessee and Virginia became the latest states to cross that $3 a gallon benchmark in the Sunday survey.

The Energy Information Administration's weekly survey of service station prices also found a new record high of $3.10 a gallon for unleaded gas on Monday. That was up 5 cents from a week earlier and up 16 percent over year-ago levels.

While crude oil prices have fallen over the last few weeks and oil supplies are high in the United States, problems at several refineries have crimped gasoline output ahead of the summer driving season.

The refinery problems include fires, power outages, and longer-than-usual maintenance periods.

The run-up in prices is a big concern for store chains, according to the retailers' trade group. Its survey of consumers released early Friday found the average consumer believes that the price of gas will reach $3.32 per gallon by Father's Day.

As a result, 40.2 percent of consumers are taking fewer shopping trips, while 37.9 percent told the survey they plan to shop closer to home. In addition, 30.7 percent said they are shopping for sales more often and 23.5 percent are using more coupons.

Perhaps of greatest concern to the retailers, 24.1 percent said they are spending less on clothing, while only one in five have delayed major purchases, such as a car, television or furniture, and 31.1 percent are dining out less.

"Consumers are entering the summer season with a cautious view of increasing gas prices," NRF President and CEO Tracy Mullin said. "To offset the effects of higher prices, more consumers are giving their wallets a little extra cushion by cutting back on discretionary spending or choosing to frequent retailers closer to home."

Interestingly enough, the retailers' survey also found that 32.6 percent have decreased their vacation travel plans this year. But a survey by AAA released Thursday showed a record number of Americans are planning to drive 50 miles or more over the Memorial Day holiday, the traditional start of the summer travel season.

Major retailers were reporting weak April sales even before the recent spike in gasoline prices started earlier this month. Wal-Mart Stores (Charts, Fortune 500), the world's largest retailer, had its worst sales comparison on record in April as it forecast essentially flat sales at stores open at least a year in May, a closely watched measure of retail strength known as same-store sales.

Overall same-store sales in April were among the weakest on record as other major retailers including Target (Charts, Fortune 500), Gap (Charts, Fortune 500), Federated Department Stores (Charts, Fortune 500) and J.C. Penney (Charts, Fortune 500) all reported declines in that key sales measure.

Big Oil went on the defensive Wednesday, getting grilled before a House panel and denying accusations that mismanagement and a lack of competition are the reasons behind this spring's record gasoline prices. Top of page

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