Fuel prices rise ahead of holiday rush

That trip to grandma’s house for Christmas may be a bit more expensive this year as pump prices across the U.S. jumped 10 cents this week, nearing $3 per gallon just ahead of the holiday rush.

According to the Energy Information Administration, the average U.S. retail price for a gallon of gasoline rose to $2.96 per gallon, the highest average since October 2008 and 32 cents higher per gallon than the Yuletide season of 2009.

In Arkansas, retail gasoline prices have jumped an average of 11 cents in the past week, and are 31 cents higher than a year ago. According to AAA’s daily fuel gauge report, Arkansas motorists are paying $2.83 per gallon for regular unleaded. Retail diesel prices are averaging about $3.12 a gallon.

Pump prices in Arkansas’ metropolitan areas range from a low of $2.80 per gallon in Pine Bluff and Little Rock to a high of nearly $2.85 in the Texarkana region. Shoppers and travelers to Fort Smith and northwest Arkansas are paying about $2.81 and $2.84 per gallon, respectively, to fill up their tanks.

If you plan to drive outside Arkansas to visit friends and relatives, the biggest increases were seen in the Midwest and on the Gulf Coast where prices in both regions surged to over 13 cents higher than the previous week. In fact, the Christmas holiday bump is the largest one-week increase since May 2009, EIA statistics show.

Additionally, Arkansans who plan to use their backyard fire pits and outdoor fireplaces during holiday parties or those who choose to roast their chestnuts and turkeys on gas grills instead of open fires will also see higher propane prices during the holidays.

This week, the average residential propane price increased by two cents to reach $2.60 per gallon, a quarter higher than a year ago. Wholesale propane prices have held steady, moving up less than one cent to $1.32 per gallon.

The recent rise in pump prices has been fueled by higher crude oil prices, which topped $90 a barrel earlier this week. The EIA expects regular retail prices to average $2.88 per gallon this winter, 22 cents per gallon higher than last winter.

The EIA expects the price for West Texas Intermediate to average about $84 per barrel this winter, more than $6 higher than the average price last winter. As U.S. and global economic conditions improve, prices for light sweet crude are projected to rise to $89 per barrel by the end of 2011 — a $2 per barrel increase from the EIA’s earlier outlook in November.