This energy fact will not be a revelation to American motorists:

The U.S. Energy Department now forecasts that gasoline prices will remain high -- around $4 per gallon -- this year and next, The Associated Press reported Wednesday.

The Energy Department's Guy Caruso, head of the department's Energy Information Administration wing, announced the revised forecast in testimony before a U.S. House of Representatives committee, The AP reported.

The EIA now expects the average U.S. gasoline price, currently over $4 per gallon, to peak at $4.15 per gallon in August. Regular-grade gasoline, which typically is 87 octane at U.S. gas stations, is expected to average $3.78 per gallon in 2008, or 97 cents above the 2007 average price.

Nevertheless, many high-cost U.S. cities -- including New York, Los Angeles, San Francisco and Boston -- are already experiencing gasoline prices in the $4.20-$4.60 per gallon range, with selected areas approaching $5 per gallon.

Moreover, the steady rise in gasoline prices is occurring despite the fact that weekly U.S. gasoline consumption has declined, on a year-over-year basis, for more than four months.

Energy traders and the EIA say higher oil prices, currently around $130-$135 per barrel, are propelling gasoline prices to record levels this summer, not refiners' charges: refiners' margins are lower than they were a year ago. What's driving oil prices higher? Increasing demand for oil from rapid-growth emerging market countries, led by China and India.

Gasoline Analysis: This summer's news at the gas pump represents a bitter pill for American motorists. They're cutting back consumption, driving less, and switching to fuel-efficient vehicles, among other changes, but they have little to show for it at the pump: so far the rise in the oil cost component of gasoline has offset reduced gasoline demand, which historically lowers the price of gasoline. Still, if motorists stay in conservation mode -- the major factor being buying fuel-efficient vehicles -- long-term this shift will help to moderate gasoline price increases. And absent public policy changes in Washington in the years ahead, or a sudden downturn in global oil demand, that's about the best one can hope for on the gas budget front.




What's your view of gasoline prices? Will the United States ever see $2 gasoline again? Or do you think gasoline prices are headed even higher? Let us know what you think.