Cost of gas to level off in the coming weeks

“Demand for fuel is strong. We’ve not seen a reduction in fuel use,” said Sundstrom. Nor have there been gasoline shortages as imports make up the shortfall in domestic refinery output.

The Triple-A won’t make its formal prediction of summer travel until next month. But Sundstrom said it appears that people seem to be adapting to the higher prices.

“One has to ponder if $3 a gallon is the new threshold to pain,” said Sundstrom.

That may be the case among many vacationers, according to a survey of 2,518 owners of RVs, travel trailers, boats and motorcycles by Nationwide Mutual Insurance Co.

Nearly seven out of ten of the survey’s respondents “say they will not change their vacation plans because of high (fuel) prices,” according to the Columbus, Ohio-based insurer.

The government report said it expects crude oil prices to average $65 a barrel over the summer because of “tight oil markets and continued international uncertainty” including tensions involving Iran.

Crude oil for May delivery rose 38 cents Tuesday to settle at $61.89 on the New York Mercantile Exchange after sliding nearly $3 on Monday.

Meanwhile, high gasoline costs — and an anticipation of large profit figures from major oil companies — has already spurred talk in Congress about price gouging.

Legislation sponsored by 86 House members would establish the first federal law against price gouging and impose criminal penalties and fines of up to $150 million for companies and $2 million on individuals.

The American Council for Capital Formation, a business advocacy group, said this week the law would cause gasoline shortages as retailers choose to shut down instead of risking prosecution whenever prices spike sharply.

Rep. Bart Stupak, D-Mich., a principal sponsor of the bill, promised to continue to push for the legislation and said Tuesday he was not surprised at the criticism from an organization that “receives hundreds of thousands of dollars from Big Oil.”

The government forecast also:

• Said ethanol production is expected to average 399,000 barrels a day this summer, an increase of nearly 28 percent from last summer as more plants opened to produce the gasoline substitute. Congress has required ethanol, made from corn, be blended with the gasoline. Another 80 new plants and plant expansions are in the works.
• A colder-than-normal first quarter has set the stage for more natural gas use this year with prices likely to average $7.83 per thousand cubic feet, about 13 percent more than last summer.
• Electricity prices are expected to increase 3 percent on average, although price hikes could be substantially greater on some states or regions where there are structural changes expected in electricity markets.

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