WASHINGTON, DC -- In 2005, the year began with almost nine consecutive months of rising gasoline prices. Now, as 2006 gets underway and retail gasoline prices have increased 13 cents in the past two weeks, is it déjà vu all over again?

The U.S. Energy Information Administration (EIA) reports in its recent edition of This Week in Petroleum, “Is this [2006] the beginning of another long price increase?”

On Tuesday, Jan. 10, EIA released its Short-Term Energy Outlook, which forecasts that prices “will generally increase over the first six months of the year, and that the average for January may be the lowest monthly average of 2006.”

EIA notes that how high retail gasoline prices may reach depends on many factors. But why gasoline prices are rising after declining through much of October, November and some of December in 2005 is a reflection of a few conditions. However, high demand during December may be “the largest factor behind the recent increase in gasoline prices,” says EIA, adding that the U.S. average retail price for regular gasoline fell to $2.15 per gallon early in the month.

“While that price was nearly 24 cents per gallon higher than a year earlier, it was 92 cents per gallon lower than the early September price peak following Hurricane Katrina, and 78 cents per gallon lower than the October price peak following Hurricane Rita,” notes EIA. 

How long will prices continue to increase? According to EIA, it is expected that prices will increase on a monthly average basis for at least the first half of 2006, but may begin to stabilize in late January or early February.

“For now, it does not appear that retail gasoline prices will average below $2 per gallon anytime soon, but barring a bumpy transition to the new gasoline formulations taking place this year or a major supply disruption, nor do we expect to see $3 per gallon either,” reports EIA.

As of January 9, the U.S. average retail price rose by 9 cents to $2.327 per gallon, which is 53.4 cents higher than last year. Prices were up throughout the country, with the East Coast, the highest regional price in the country, also showing the largest regional increase of 10.6 cents to $2.37 per gallon. Midwest region and the West Coast prices also increased.

Meanwhile, retail diesel fuel prices increased by 4.3 cents to reach $2.485 per gallon, which is 55.1 cents higher than last year. Prices were up throughout the country, with the largest price increase occurring on the West Coast. East Coast prices increased 4.7 cents to $2.528 per gallon, while the lowest prices could be found in the Rocky Mountains at $2.421 per gallon.

To access this week’s complete This Week in Petroleum, click here.