The American Petroleum Institute on Wednesday again called on Washington to increase domestic production of oil on both federal and other public lands, to help consumers by bringing gasoline prices down even further.
Crude oil, which traded at roughly $110 a barrel at the end of February, has declined since. The price had dipped to $89 a barrel by Wednesday, closing the day at $90.
API chief economist John Felmy said gasoline prices nationwide have been dropping for the past seven weeks. Gasoline, which is refined from crude oil, is following the latter's downward slide, he said.
Felmy said the decline has various causes but stems mainly from weakness in European economies and slow growth in the U.S., both of which have cut the world demand for oil. A slowdown in the Chinese economy also helped bring oil prices down, Felmy said.
Gasoline on the New York Mercantile Exchange traded at $2.80 a gallon Wednesday, six cents lower than its previous close, and 52 cents off its 52-week high.
The American Automobile Association reports the nation's average gasoline price is $3.67 a gallon on Wednesday. That is 17 cents below last year's average.
But according to the API, gasoline prices at that level are still high. The U.S. Energy Information Administration, Felmy said, anticipates the summer's gasoline prices to average $3.79. That is still a significant price for the average family, Felmy said, who added gasoline at that price would equate to $3,000 in annual expenses for an average household.
As driving season in the U.S. approaches, the summer period when people use their cars more, API suggested drivers consolidate trips by carpooling, driving slower to get better mileage, tuning their engines and properly inflating their vehicles' tires correctly.
Felmy said lawmakers should do more to help ease costs for consumers.
Energy policy should encourage more development on public lands and federally controlled waters, ensure regulations are reasonable and require faster project approvals, Felmy said. With these steps, we could begin to increase oil production almost immediately and encourage the investments that could provide more significant additions to supply within a few years.
With more supply, the API argues, prices will drop. But the Congressional Budget Office last month released a report claiming the opposite.
Policies that promoted greater production of oil in the United States would probably not protect U.S. consumers from sudden worldwide increases in oil prices stemming from supply disruptions elsewhere in the world, even if increased production lowered the world price of oil on an ongoing basis, read the report.