[Linda Stouffer, Cnn Anchor:] Gas prices are heading up. Brooks Jackson has more now for you on just where gas prices are heading.
[Brooks Jackson, Cnn Correspondent:] Here we go again: gasoline prices rising faster than the temperature. Regular gasoline averaged $1.40 barely a month ago, but it shot up so fast it's already exceeded Energy Department predictions for summer, getting an average of $1.62 last week, and well over $2 in some areas. The problem isn't the Organization of the Petroleum Exporting Countries. Crude oil prices have eased. U.S. crude inventories the amount on hand are higher than last year. The problem is at the refineries, operating at lower levels than they were last year, sending gasoline inventories down 7 percent below a year ago, the lowest since 1994, with driving season still to come.
[Robert Sinclair, American Automobile Association:] There hasn't been a new refinery built in the United States since the late '70s, and in fact, we're down 25 percent since then in refinery capacity.
[Jackson:] Is it a conspiracy? Last year, when prices briefly spiked to more than $2 per gallon in some parts of the Midwest, politicians called for an investigation. But after nine months, the Federal Trade Commission found "no credible evidence of collusion. Nothing illegal. A combination of many factors was likely responsible for the price spike." And so it is again. Clean air regulations are one factor. The price of gasoline required in smoggy areas currently averages 10 cents per gallon more than conventional gasoline. And it's been made more difficult this year for marketers to switch over to required summer blends.
[Phil Flynn, Alaron Trading:] What we have to do is all the storage tanks, essentially, at this time of year, have to be emptied with the old stuff, you know, the polluting stuff, in the winter and put in with these new summer blends.
[Jackson:] Another factor is refinery maintenance. Several of them are shut down. Engineers are trying to squeeze out more production in the long run, but pinching supplies right now. And of course, the consumer factor. The affluent American motorist is burning more and more gasoline, even at higher prices. Consumption is up 6 percent from over a year ago. [on camera]: With supplies tight and demand strong, some fear prices could spike to over $3 per gallon in places if everything goes wrong. So stay tuned. Brooks Jackson, CNN, Washington.
[Stouffer:] $3 per gallon? Ouch.
[Jason Carroll, Cnn Anchor:] That is pretty bad. TO ORDER A VIDEO OF THIS TRANSCRIPT, PLEASE CALL 800-CNN-NEWS OR USE OUR SECURE ONLINE ORDER FORM LOCATED AT www.fdch.com