Ask anyone who drives: The price of gas is going nowhere but up. According to the U.S. Department of Energy, the cost of a gallon of regular unleaded gasoline is currently at a national average of $2.01, up from $1.49 at the end of 2003. It is 52 cents per gallon more expensive than a year ago.
About half of the increase reflects higher crude oil prices, with the remainder reflecting the impact of low inventories, robust demand and lower-than-expected gasoline imports, according to the U.S. Department of Energy.
Of course, gas prices vary, depending on where you live. According to GasPriceWatch.com, a gallon of regular unleaded gas costs $3.05 in Bridgeport, Calif., while in Greenwood, La., a gallon of regular unleaded is a bargain at $1.72.
The price isn't expected to decrease anytime soon. The U.S. Department of Energy predicts that prices are likely to remain high and volatile through the summer. It projects that the national average for regular unleaded gas will reach a peak of $2.03 per gallon in June. This would be a record in nominal dollar terms and the highest inflation-adjusted summer average since 1985.
Gasoline prices may be at record levels, but there are things you can do to cut down on your gas bill.
If you're in the market for a new vehicle, consider buying a gas/electric hybrid, such as those manufactured by Honda Motor, Toyota Motor and Ford Motor. These vehicles use regenerative braking, which means that braking energy is turned back into electricity instead of heat. They do not need to be recharged through an electrical outlet, since they run entirely on gasoline.
The Honda Insight and the Toyota Prius, which retail for about $20,000, get 60 miles per gallon on city streets. Ford's Escape Hybrid, available at the end of this summer, will be the world's first "no-compromise hybrid" SUV. The Escape Hybrid has a gas engine that automatically turns on and off, depending on the driving conditions, so a tank of fuel goes further.