Gasoline Could Top Four Dollars Per Gallon

Who didn't know this was coming? The major factor in the increasing gasoline prices, according to this article, is decreasing refining activity. Why is it declining? Is Hurricane Katrina still getting the blame? What are the oil companies doing with the billions of dollars in profits? So many questions, so many crooks.-Jake

NEW YORK (CNNMoney.com) -- Gasoline prices, already above $3 a gallon in some states, could charge higher this summer and hit $4 a gallon in some locations, according to one industry expert.

Pump prices were supposed to peak below $3 a gallon this May, then drop off before the summer driving season got into full swing, according to the Energy Department's price forecast.

Well, we're not even out of April yet, and the nationwide average price for a gallon of unleaded regular has hit $2.87.

One big factor driving prices: gasoline inventories continue to fall. After a promising one-week boost in refining activity, the latest report Wednesday actually shows refining activity falling. And demand is already soaring, before the summer driving season is in full swing.

What this means for prices is obvious, and to most drivers it is not good news.

"More and more communities are going to see gasoline that approaches or exceeds $4 a gallon," said John Kilduff, an energy analyst at Man Financial in New York. "Where we're currently at with prices, that's a given."

While geopolitical tensions have driven up the cost of crude oil, which accounts for about half the cost of a gallon of gas, refinery problems here in the United States are largely to blame for the price jump.

Five states - California, Hawaii, Oregon, Washington and Nevada - already have average prices above $3 a gallon, according to the motorist organization AAA. In California, the average price of gas has reached $3.35 a gallon.

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