Video: Fuel in focus

msnbc.com staff and news service reports
updated 3/25/2004 4:46:17 PM ET 2004-03-25T21:46:17

For the third straight day it got more painful at the pumps for motorists, as the American Automobile Association said Thursday the price of regular gasoline hit another all-time high, adding fuel to a increasingly heated debate in the U.S. presidential campaign.

The average price for regular gas rose two-tenths of a cent to $1.742 a gallon at self-service stations. Before this week, the record high by AAA standards was set late last summer, toward the end of the peak driving season.

A year ago, the average gasoline price was $1.68 a gallon, said the AAA, which is the largest motorist and travel group in the United States and commissions a daily survey of more than 60,000 gas stations.

Oil prices were sharply lower Thursday, extending losses after U.S. data showed a big jump in crude supplies and as doubts grew that the Organization of Petroleum Exporting Countries would be able to implement fully a planned April 1 output cut. But even though U.S. light crude traded $1.50 a barrel lower at $35.51, it is still well above the $28 a barrel it was a year ago.

The U.S. government earlier this week said that the highest price for gasoline this year is expected in April and May near $1.83 per gallon.

Campaign rhetoric energized
Already, the debate over fuel prices is forming in the presidential contest, with Democrats in Congress testing themes John Kerry can use against Bush, and Republicans reminding voters that Kerry backed a 4.3-cent increase in the gas tax in 1993 and spoke in support of a 50-cent tax increase on a gallon a year later.

“Voters who are concerned about higher gas prices certainly will be troubled by a candidate who has supported an astronomical increase in the price per gallon,” Bush campaign spokesman Steve Schmidt said. The 50-cent increase, proposed by another senator for deficit reduction, did not come to a Senate vote.

This time, prices have climbed on Bush’s watch and his words against President Clinton and Al Gore from 2000 hang out there to be used, in turn, against him: “What I think the president ought to do,” Bush said then, “is he ought to get on the phone with the OPEC cartel and say, ‘We expect you to open your spigots.”’

Kerry is mining a similar vein. He said Bush and Dick Cheney “campaigned promising to make energy a centerpiece of their administration’s agenda,” only to see record industry profits and prices.

Gas prices are about 8 cents higher than their peak in 2000.

Video: Lower taxes, higher gas prices The idea that simply jawboning OPEC can bring back cheap gas is dismissed by oil analysts as an oversimplification of the reality of the marketplace, where prices are moved by supply, reprocessing and distribution matters too complex to form a campaign sound bite.

Bush spokesman Scott McClellan offered no sense Wednesday that pressure on OPEC is a magic pill, saying blandly, “We continue to engage in ongoing and regular consultations with major producers from around the world.”

McClellan said the country needs an energy policy that increases domestic production, expands conservation and promotes renewable energy. For his part, Kerry aggressively pitches conservation and renewables but opposes drilling in the Arctic National Wildlife Refuge and coastal waters, except for existing operations in the Gulf of Mexico.

The Bush administration has ruled out tapping into the nation’s emergency reserve to put more oil on the market; indeed, it has been replenishing that pool. Kerry has not proposed drawing from the reserve, either.

Demand picking up
The unofficial summer driving season when demand for gasoline is highest begins with the Memorial Day weekend in late May.

In relative terms, this is not the highest price per gallon. In 1981, when adjusted for inflation, the average price hit $2.94 a gallon.

And American gasoline is inexpensive when compared with European nations which levy heftier taxes on the motor fuel.

California continues to have the highest average price in the nation at $2.134 a gallon, the AAA said.

Also with prices more than $1.80 a gallon were Hawaii at $2.096, Nevada at $2.055, Arizona at $1.909, New York at $1.865, Oregon at $1.830, Utah at $1.825, Idaho at $1.823 Washington at $1.812, and Alaska and Connecticut at $1.802.

South Carolina had the lowest average in the United States, at $1.611 per gallon. Also with the average pump price less than $1.65 a gallon were Oklahoma at $1.616, Texas at $1.624, Georgia at $1.616, New Jersey at $1.639, Missouri at $1.641, Kentucky at $1.647, and Alabama, Louisiana and Virginia at $1.648.

The Associated Press and Reuters contributed to this report.

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