Retail gasoline prices hit $2.80 per gallon, highest mark since October 2008

Pain in the tank: Gas prices highest since 2008

Motorists are paying the highest prices for gas since October 2008. Retail gasoline prices rose on Thursday on an expected increase in demand and as more expensive spring and summer blends of gasoline make their way to the pumps.

The nationwide average hit $2.799 per gallon, a penny higher than Wednesday, according to AAA, Wright Express and Oil Price Information Service.

Prices have now jumped 18.9 cents in the past month and are 87.9 cents higher than year-ago levels. Back on Oct. 23, 2008 prices averaged $2.8215 per gallon.

The Energy Department and many industry experts expect prices to top $3 this spring.

Gasoline prices tend to move higher in the spring as more drivers hit the road and refiners shut down units for maintenance, as they prepare to make more expensive summer blends of gasoline with fewer smog-causing emissions.

Wholesale gasoline prices also are at their highest point since October 2008.

Americans now spend about a $1 billion a day to keep their cars and trucks filled, an increase of nearly $300 million from a year ago.

With the average driver using about 50 gallons a month of fuel, the bill runs $140 per month and is expected to rise over the next several weeks.

The hit from gas prices comes as oil prices backed off their two-month highs on Thursday.

Crude prices fell 73 cents to settle at $82.20 a barrel on the New York Mercantile Exchange.

Oil has traded between about $70 and $85 for months as economic reports waver on the strength of the economic recovery in the U.S., the biggest consumer of oil.

“The question is, fundamentally right now in the world is $85 justified?” said Phil Flynn of PFGBest.

While oil and gasoline prices have been rising, natural gas prices have done the opposite.

Prices fell nearly 4 percent Thursday after the Energy Information Administration said natural gas stockpiles shrank less than expected last week.

Prices have dropped more than 30 percent since the beginning of the year.

Despite a bitterly cold winter in much of the country that has driven strong demand, abundant supplies have kept a lid on prices.

In other Nymex trading in April contracts, heating oil fell 2.04 cents to settle at $2.1127 a gallon, and gasoline dropped 0.88 cent to settle at $2.3009 a gallon. Natural gas slid 21.8 cents to settle at $4.085 per 1,000 cubic feet. Earlier, natural gas hit a new 52-week low of $4.054.

In London, Brent crude was down 48 cents to settle at $81.48 on the ICE futures exchange.

Associated Press writers Pablo Gorondi in Budapest and Alex Kennedy in Singapore contributed to this report.