Gas to rise 17 cents over last summer . Consumers will pay more for gasoline this summer due to record demand and higher crude prices.

CNN April 8, 2003: 10:25 AM EDT

WASHINGTON (Reuters) - U.S. consumers will pay an average of 17 cents more a gallon for gasoline this summer compared to last year due to higher crude oil prices, low motor fuel stocks and record gasoline demand, the government said Tuesday.

But because of uncertainties in world oil markets due to the war in Iraq as well as with U.S. refinery and distribution systems, the Energy Information Administration warned that gasoline prices could be as much as 16 cents above or below the projected $1.56 per gallon summer average.

"High crude oil costs, low motor gasoline inventories and growing gasoline demand are factors contributing to high gasoline prices this year," the Energy Department's analytical arm said in its annual summer driving forecast.

The projected 17-cent increase for this summer's gasoline price is close to average summer prices in 2000 and 2001. However, it falls well short of the all-time summer high set in 1980 of $2.77 per gallon -- when adjusted for inflation and expressed in year 2003 dollars.

The price for oil accounts for about 40 percent of the cost of a gallon of gasoline.

While crude oil prices have fallen since the start of the war in Iraq, crude costs remain above levels from last year because of the disruption in Iraq's oil exports.

The disruption in Venezuela's oil production, a large part of which is exported to the United States, since December due to a workers strike also contributed to lower oil inventories and higher crude prices, EIA said.

U.S. gasoline inventories started the summer driving season at 200 million barrels, about 13 million barrels below the same time last year, which will make the United States more dependent on gasoline imports than in previous summers, according to EIA.

"The inventory situation is expected to worsen somewhat by the end of the current quarter as gasoline demand begins to increase," the agency said.

Gasoline demand is expected to increase 1.6 percent, or by 150,000 barrels per day (bpd), this summer driving season which runs April through September to a record 9.18 million bpd, EIA said.

U.S. summer gasoline production is forecast to increase 2.1 percent, or about 180,000 bpd, to 8.44 million bpd. To help meet demand, gasoline imports will have to make up the difference and are projected to average a record 746,000 bpd, up 1.9 percent or 14,000 bpd, according to EIA.