Gas Prices Reach Record High

Gas prices again rise, with the average price in the United States at $3.10 a gallon. That price is up 5 cents, since the week before and up 16 cents from a year before that. The price of gas now is at a record high, beating the previous record price on Sunday May 13th. And that record soundly beats the record previous set shortly after Hurricane Katrina in 2005. The price of oil, too, rose with refinery problems in both the United States and in other countries. Both before the summer season, and the government says that gas inventory rose some last week, however, they are still low by historical standards. With Memorial Weekend around the corner, there's little chance for refineries meet demand, driving the market, and likely prices.

High gas prices are having an affect on the economy as well, with consumers cutting back on spending, which accounts for around two-thirds of the economy. U.S Energy Information Administration predicts that the price of gas will remain close to $3, either above or below, and will not reach $4 this summer--like many consumers worry to happen. Head of EIA, Guy Caruso, wants OPEC to boost production to meet tight demand and not wait until their next meeting in September.

Record high gas prices came the same day as Bush's orders to government agencies to develop regulations to reduce U.S. gas consumption. Bush was quoted as saying, "Our dependence on oil creates a risk for our economy, because a supply disruption anywhere in the world could drive up American gas prices to even more painful levels." His plan will not affect this summer's gas prices. The plan calls for U.S. gas dependency to be cut by 20 percent by 2017, and have Americans using other alternative fuels. Many fuels are now being made from vegetable oils and ethanol or mixture of one of the former with gas.