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http://dailynews.netscape.com/dailynews/cnnnews.tmpl?story=gas.prices0526.html WASHINGTON-- U.S. gasoline prices will be higher than last year as an estimated 35 million motorists fuel up for Memorial Day traveling.
Beginning June 1, U.S. oil companies are required by federal law to sell a more expensive, less polluting fuel, and they are already passing the added cost on to consumers.
"It's more difficult to produce because it requires heavy significant financial investment in the refineries," John Felmy of the American Petroleum Institute told CNN.
U.S. drivers are currently paying an average of $1.53 for every gallon they put in their tanks, up roughly 37 cents a gallon from last year at this time and only one penny lower than the all-time national high recorded last March, according to data compiled by the Oil Price Information Service (OPIS).
But when adjusted for inflation, U.S. gasoline prices work out to be about $2.50 a gallon lower than they were in 1980, when supply was disrupted during the Iranian revolution.
AAA: 'We can't blame OPEC'
"We can't blame OPEC this time," said Geoff Sundstrom of the American Auto Association, referring to the Organization of Petroleum Exporting Countries, a powerful 11-nation cartel that controls nearly 40 percent of the world's oil supply.
"They promised to raise production and they've lived up to that," Sundstrom said. "This is a domestic issue. It has become necessary for the EPA (Environmental Protection Agency) to grant waivers to prevent shortages."
Fears of shortages of the new gasoline, only days ahead of the deadline, have already prompted a handful of marketing associations in the Midwest to request leniency from the EPA, allowing them to sell dirtier conventional fuel.
The EPA has so far granted leniency in St. Louis, Missouri, and is considering waiver requests from Chicago and Milwaukee amid spiraling concerns over inventories there.
U.S. strategy: 'Quiet diplomacy'
U.S. officials said they were taking an international approach to the problem by asking OPEC to increase output in hopes of forcing prices down.
"What we're doing to deal with the problem is talk to the OPEC countries ... quiet diplomacy," Energy Secretary Bill Richardson told CNN. "Tell them to keep their options open on increasing production."
Just last March 29, nine OPEC ministers announced they would increase oil production by 1.45 million barrels per day following a phone call by Richardson to the cartel president.
The next meeting of OPEC ministers is scheduled for June 21, in Vienna, Austria. But Thursday, Venezuela requested the date be postponed until June 26 to allow President Hugo Chavez to attend.
Congress searches for options
Congress has asked experts to find ways of producing cleaner-burning alternative fuels that might reduce demand for gasoline and help force prices down.
Another proposal is to boost U.S. oil production by allowing drilling in currently protected wildlife refuges.
"There are going to be some trade-offs and drilling in presently restricted areas is going to be one of those areas," said William Martin of Washington Policy and Analysis, an issue-oriented think tank.
U.S. gasoline prices among lowest in world
While U.S. drivers may feel they are paying too much for their fuel, they should actually consider themselves lucky; their gasoline prices are among the lowest in the world.
In countries such as Great Britain, Italy, France and Sweden, for example, taxes often take up to 80 percent of the full charge for retail gasoline as a favorite form of government revenue-raising.
British drivers last year paid an average of $4.26 per U.S. gallon compared to the U.S. average of $1.16.
According to OPIS U.S. pricing data, retail gasoline prices were the highest in Illinois on May 25, averaging $1.72 a gallon -- roughly a nickel more expensive than in California, where prices are usually the most expensive in the nation.
In Connecticut, where taxes are a large price component, gasoline costs an average $1.65 a gallon. According to a survey by the New York City Consumer Affairs Office, gasoline prices in New York City averaged $1.60 a gallon.
Still, history suggests that the gasoline price squeeze has been worse.
"In real terms, consumers today are paying considerably less for gasoline than they did during World War I," said Daniel Yergin, Pulitzer Prize-winning author and oil analyst for Cambridge Energy research Associates.
Reporter Kathleen Koch and Reuters contributed to this report.