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CNN Live At Daybreak

Gas Gone Wild: Pumping Up the Prices

Aired February 20, 2004 - 06:13   ET

THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.

THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.


CAROL COSTELLO, CNN ANCHOR: Are you still muttering under your breath how gas prices are just insane? You're saying it out loud now, aren't you, to anyone who will listen. Well again this morning, we're asking the question on the tip of your tongue, why?
Live to Washington and Julie Vallese. She has some information for us this morning.

Good morning.

JULIE VALLESE, CNN CORRESPONDENT: Good morning, Carol.

Absolutely. Filling up your gas tank these days could really have you fuming. Gas prices haven't reached record highs, but they are getting close. The prices may come down in early spring, but they are not expected to stay there for long.

(BEGIN VIDEOTAPE)

JULIE VALLESE, CNN CORRESPONDENT (voice-over): For six consecutive weeks, gas prices have gone up and the long-range forecast doesn't have them coming down.

MANTILL WILLIAMS, NATIONAL DIRECTOR, AAA: The economy is growing. People are starting to have more confidence in their personal finances. So what we probably will have high demand with low inventories. That seems like a recipe that we may be looking at record high gas -- the record high gas prices we experienced last year.

VALLESE: Experts say other factors in higher gas prices, the politically unstable environment in Venezuela and China's billion-plus population emerging as a major force in gasoline demand.

JOHN FELMY, CHIEF ECONOMIST, AMERICAN PETROLEUM INST.: Well in order to see gasoline prices fall dramatically, you'd have to see crude oil prices fall dramatically.

VALLESE: That, analysts say, isn't likely to happen. OPEC has announced it is cutting crude oil production.

WILLIAMS: This year we probably will be reaching record high gas prices or at least come pretty close to it.

VALLESE: The average price for a gallon of gasoline is about $1.65. That's up almost a nickel since mid-January. FELMY: The main reason for variation in gasoline prices is taxes, the type of gasoline that you are using. So, for example, some gasolines, like California's gasoline, is much more expensive to produce.

VALLESE: In areas such as L.A., San Diego and Santa Barbara, gas prices are about $1.90. But the highest average gas prices, Honolulu, just a click under two bucks.

(END VIDEOTAPE)

Now taxes, both state and federal, do make up the overall price of a gallon of gasoline. And as Congress debates a new six-year transportation bill, some lawmakers on Capitol Hill have proposed higher federal gas taxes to pay for the funding. That's something the Bush administration says isn't an option -- Carol.

COSTELLO: I'm just looking behind you to check out gas prices in the city. Are you in the city of Washington, D.C.?

VALLESE: I am in downtown D.C. and the prices around the metropolitan area do pretty much match these prices. I filled up my gas tank the other day, it's a pretty much average family car, and it cost me $30 to fill it up from empty to full.

COSTELLO: That hurts.

Julie Vallese live from Washington.

TO ORDER A VIDEO OF THIS TRANSCRIPT, PLEASE CALL 800-CNN-NEWS OR USE OUR SECURE ONLINE ORDER FORM LOCATED AT www.fdch.com






Aired February 20, 2004 - 06:13   ET
THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
CAROL COSTELLO, CNN ANCHOR: Are you still muttering under your breath how gas prices are just insane? You're saying it out loud now, aren't you, to anyone who will listen. Well again this morning, we're asking the question on the tip of your tongue, why?
Live to Washington and Julie Vallese. She has some information for us this morning.

Good morning.

JULIE VALLESE, CNN CORRESPONDENT: Good morning, Carol.

Absolutely. Filling up your gas tank these days could really have you fuming. Gas prices haven't reached record highs, but they are getting close. The prices may come down in early spring, but they are not expected to stay there for long.

(BEGIN VIDEOTAPE)

JULIE VALLESE, CNN CORRESPONDENT (voice-over): For six consecutive weeks, gas prices have gone up and the long-range forecast doesn't have them coming down.

MANTILL WILLIAMS, NATIONAL DIRECTOR, AAA: The economy is growing. People are starting to have more confidence in their personal finances. So what we probably will have high demand with low inventories. That seems like a recipe that we may be looking at record high gas -- the record high gas prices we experienced last year.

VALLESE: Experts say other factors in higher gas prices, the politically unstable environment in Venezuela and China's billion-plus population emerging as a major force in gasoline demand.

JOHN FELMY, CHIEF ECONOMIST, AMERICAN PETROLEUM INST.: Well in order to see gasoline prices fall dramatically, you'd have to see crude oil prices fall dramatically.

VALLESE: That, analysts say, isn't likely to happen. OPEC has announced it is cutting crude oil production.

WILLIAMS: This year we probably will be reaching record high gas prices or at least come pretty close to it.

VALLESE: The average price for a gallon of gasoline is about $1.65. That's up almost a nickel since mid-January. FELMY: The main reason for variation in gasoline prices is taxes, the type of gasoline that you are using. So, for example, some gasolines, like California's gasoline, is much more expensive to produce.

VALLESE: In areas such as L.A., San Diego and Santa Barbara, gas prices are about $1.90. But the highest average gas prices, Honolulu, just a click under two bucks.

(END VIDEOTAPE)

Now taxes, both state and federal, do make up the overall price of a gallon of gasoline. And as Congress debates a new six-year transportation bill, some lawmakers on Capitol Hill have proposed higher federal gas taxes to pay for the funding. That's something the Bush administration says isn't an option -- Carol.

COSTELLO: I'm just looking behind you to check out gas prices in the city. Are you in the city of Washington, D.C.?

VALLESE: I am in downtown D.C. and the prices around the metropolitan area do pretty much match these prices. I filled up my gas tank the other day, it's a pretty much average family car, and it cost me $30 to fill it up from empty to full.

COSTELLO: That hurts.

Julie Vallese live from Washington.

TO ORDER A VIDEO OF THIS TRANSCRIPT, PLEASE CALL 800-CNN-NEWS OR USE OUR SECURE ONLINE ORDER FORM LOCATED AT www.fdch.com