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Gasoline prices jumped nearly 10 cents a gallon in the last week. And drivers could see even higher prices as summer approaches, say forecasters. A new report from the Energy Department projects that the price for regular will be at least 25 cents higher this summer, when compared to last year.

NPR's Scott Horsley reports.

SCOTT HORSLEY reporting:

Gasoline prices typically rise in anticipation of the summer driving season. But in 2004, it was mid-May before prices topped the $2 mark. Last year, gas prices reached that milestone earlier, in mid-March. And this year, $2 gas is but a distant reflection in the rear view mirror. It's $3 a gallon we seem to be closing in on. AAA spokesman Geoff Sundstrom says gasoline prices could climb another 10 to 20 cents a gallon between now and Memorial Day.

Mr. GEOFF SUNDSTROM (Spokesman, AAA): Unfortunately, there really doesn't seem to be anything on the horizon that would cause us to think that prices would come down, you know, if we were to suddenly see an easing in international tensions, and the price of oil was to retreat, that would be helpful. But nothing that we're seeing in the news report that suggests that's going to happen.

HORSLEY: Instead, mounting concern over Iran helped push crude oil prices up yesterday to nearly $69 a barrel. That's the highest crude has been since last September and the days immediately following Hurricane Katrina. Today's high prices don't stop at the oil well. Oil refineries are adding to the high cost. The refining process is complicated this year, as more refineries start adding ethanol to the mix instead of the gasoline additive MTBE.

CEO Bruce Smith of the Tesoro Refining Company says with refinery capacity already stretched thin, there could be more upwards pressure on prices.

Mr. BRUCE SMITH (CEO, Tesoro Refining Company): Potentially, with some other disruptions in the summertime or higher demand just from driving, you could see prices breaking $3 again. And that's not a prediction. It's just, I think, looking at the probability, there are a lot of things that could push it through to $3.

Mr. LOREN GIBBS(ph) (College Student, San Diego): It's tough to afford that much.

HORSLEY: San Diego college student Loren Gibbs is already hurting after paying $2.87 a gallon to fill the Mazda Protégé he shares with his girlfriend.

Mr. GIBBS: Between us, we fill this thing up about once a week. And this is a little four-cylinder. The only thing the car gets used for is for us to get to school and for her to get to work. So, you know, we don't take driving trips or anything anymore because gas is too expensive.

HORSLEY: Consumers' demand for gasoline did actually shrink a bit last fall when prices briefly topped three-dollars a gallon. But AAA's Sundstrom says the conservation effort was short lived.

Mr. SUNDSTROM: We're not seeing an adjustment in terms of the amount of gasoline consumed. I think where we are seeing a change in behavior is in consumer preference for the types of vehicles they're buying. It seems as though consumers are clearly shifting away from larger SUVs and passenger cars to those that are more fuel-efficient.

HORSLEY: Sundstrom says, in the long run, that could have a big affect on demand for gasoline. He says consumers who are shopping for a new car should consider, during the life of the vehicle, gas prices could climb by another dollar per gallon or more.

Scott Horsley, NPR News, San Diego.

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