AAA: Brace for Higher Pump Prices

NEW YORK – U.S. drivers, already paying the highest retail gasoline prices on record, should expect further increases at the nations pumps due to skyrocketing costs for crude oil (search) and a flurry of recent refinery problems, the AAA motorists group (search) said on Thursday.

"We think American drivers should brace themselves for a fairly large increase, as soon as this weekend," said Geoff Sundstrom (search), AAA spokesman. "It could be an increase of around five cents a gallon nationwide."

Prices at the pumps are already zipping along at a record near $2.40 a gallon on average, up more than a dime from last month, according to the AAA's daily survey of 60,000 stations.

But a recent surge in the cost of crude oil to $66 a barrel, and a spate of problems at the nation's refineries, from California to the Gulf Coast, will mean further steep increases in fuel prices.

"The price of crude oil is a big reason pump prices are in record high territory," said Sundstrom.

"On the other hand, we have a long-term issue to resolve with regards to refining capacity. With fires and operational problems of various kinds recently, it looks like gasoline supplies have become crimped," he said.

Around 10 U.S. refineries have reported unplanned unit shutdowns since mid-July. Refineries typically become more prone to outages in late-summer as they try to keep up with strong demand.

While U.S. retail gasoline prices are at a record in nominal terms, when adjusted for inflation they remain below the peak of around $3 a gallon hit in the early 1980s.