US regular gasoline prices rise to highest average at $3.98 a gallon

US regular gasoline rose to the highest national average of $3.98 a gallon (US gallon equals 3.78 litres,  lower than the 4.54 litres in the imperial gallon) in early May.

As compared to the price last year on 4 July, the current price is 23 per cent higher, www.wallstreetotc.com reported.

USA Today quoted Tom Kloza, chief oil analyst at GasBuddy.com, the US would see the highest 4th July prices since 2008, because of the instability in Iraq.

He said he would not rule out something happening near Basra or south of Baghdad, which would push prices in the US above $4.

According to Automobile Association of America (AAA) spokeswoman Jessica Brady although gas prices in the Southeast remained relatively stable from last week, it would not be surprising to see gas prices inch up slightly before the holiday weekend.

She added, even though pump prices were higher than they were this time last year, they were not expected to deter holiday travelers.

Gas prices used to fall in the upcoming weeks of the holiday in previous years, but that was not the case this summer.

AAA said in its weekly assessment of price trends, that concerns over the ongoing violence in Iraq were keeping oil prices hovering around $106 a barrel, which made it more expensive to produce gasoline.

AAA had earlier predicted a fall in gas prices by 10 to 15 cents per gallon during June, after a typical pattern of lower pump prices in early summer, however, the organisation said in a statement "that now appears unlikely due to higher oil costs.

This means that even though the national average has only increased a few cents per gallon since the Iraq violence intensified, drivers are likely to pay substantially higher gas prices than they would have otherwise."

Meanwhile, the biggest rise in the past week was registered in Alaska, where pump prices shot  up 11 cents to $4.20, the second highest statewide average behind Hawaii's $4.34.

California was the next highest at $4.12, with Washington state at $3.999.