New York City Gas Prices at Record High
By: Steve Sawyer | Source: Newsday
May 7, 2004 11:35AM EST

By Tom Incantalupo and Tania Padgett
Staff Writer

May 6, 2004, 6:47 PM EDT

Gasoline prices in the city reached a sad milestone for drivers Thursday as the average for regular unleaded topped $2 a gallon for the first time, according to the American Automobile Association's latest survey.

Long Island is not far behind, with the average for regular unleaded gasoline at $1.961 Thursday, also a new record in the motorist group's daily survey.

In both cases, that's about 25 cents more than at this time last year. And, in both areas, premium fuel, required in some cars and light trucks, averages above $2 -- at $2.186 in the city and $2.142 on the Island, the AAA said.

"This is too much for me," said 21-year-old Nosheen Shah of Richmond Hill, who attends Nassau Community College on Long Island and was refueling her 1988 Acura at an Exxon station on Queens Boulevard in Jamaica Thursday. "This hurts my budget." Regular unleaded was $2.11 a gallon there.

Although above the national average of $1.857, prices locally aren't nearly the nation's highest; in San Francisco, for example, regular unleaded averaged $2.255 Thursday, the AAA said.

The previous high in New York City, recorded by the AAA on Labor Day weekend, was $1.968. The highest for Long Island, recorded at the same time, had been $1.941 until this month.

Experts place much of the blame on rising crude oil prices -- almost $40 a barrel Thursday -- which have resulted from OPEC output cuts, the decline in value of the dollar, growing worldwide demand, and tensions in the Middle East. Further, experts say, increasingly complex federal and state clean air restrictions have forced refiners to produce more than a dozen different grades of gasoline, increasing costs and reducing available supply.

Dr. Rajeev Dhawan, director of economic forecasting at Georgia State University's Robinson College of Business, says there's more to come this summer. "Most likely," he said, "prices will rise another 10 percent -- easily."

Dhawan thinks prices would have to reach $3 gallon and stay there for a time, though, before most Americans would significantly alter their driving habits and vehicle choices. "I think people would drive less before they'd change the car that quickly," he said.

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