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CNN Sunday Morning

Gasoline Prices Expected to Rise

Aired April 08, 2001 - 09:38   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.
KYRA PHILLIPS, CNN ANCHOR: The Energy Department says gasoline prices will probably be high again this summer. Just how high depends on supply and demand though. And circumstances have put that in a delicate balance as CNN's David George reports.

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DAVID GEORGE, CNN CORRESPONDENT (voice-over): The Energy Department expects gasoline to average a $1.49 a gallon across the country this summer, four cents lower than last year's average of a $1.53. But -- and this is a significant but the government's projections, quote: "presume no disruptions in gasoline production or distribution."

MARK RODEKOHR, ENERGY INFORMATION AGENCY: There is going to be supply tightness. Inventories are relatively low. That means there is some risk of short-term price increases.

GEORGE: In fact, the Energy Information Administration's report states the case even more strongly. "The probability of a real gasoline price increase this summer," it says, "is high." Here's why -- the DOE says gasoline stockpiles are at about nine billion barrels below last year's levels, which were, in the Energy Department's words, "sharply below the year before."

Refineries are expected to be running at 96 percent capacity this summer, the government says. A figure that doesn't leave much leeway if something goes wrong. Even if everything goes right, the DOE estimates U.S. domestic gasoline production will average 8.48 million barrels per day this summer while total, daily, average demand will increase to 8.59 million barrels. That's a daily gasoline gap of about 100,000 barrels.

The Energy Department says the U.S. will import an average of 230,000 barrels of gasoline per day this summer, giving OPEC and other international producers a continuing say in the cost of getting around America in the summertime.

David George, CNN.

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