Gasoline costs more and is expected to climb

Compared to a year ago, Chicago and suburban drivers are shelling out nearly $1 more per gallon for regular gasoline - and experts say prices are expected to keep rising.

AAA's Fuel Gauge Report's daily averages for the region show a gallon of regular gasoline cost $2.97 on Thursday, compared to $2.15 on the same day last year. The national average was $2.79, compared to $1.92 a year ago.

"Energy prices are running hotter than the economy or the underlying supply and demand suggest," said Diane Swonk, an economist with Mesirow Financial in Chicago. "The good news is that fundamentals eventually dominate. The bad news is that this can persist for some time."

Not enough supply, too much demand along with the amount of taxes that Chicago area consumers pay for gasoline are blamed, said Bill Fleischli, vice president of Springfield-based Illinois Pretroleum Marketers Association, which owns or supplies about 95 percent of the gas stations in Illinois.

"We've been having nicer weather and more people are starting to drive more," he said.

Motor fuel taxes and sales taxes add about 70 cents per gallon. The state takes about 19 cents, the federal government about 18.6 cents. Chicago takes about 5 cents and Cook County about 6 cents. Other counties and local suburbs vary.

The sales tax is 10 percent of the final sale, so if the price of gasoline goes up, so does the amount you pay, Fleischli said.

In addition, the formula is changing to the summer blend by May 1, so expect to pay more for that processing, said Beth Mosher, a spokeswoman for AAA in Aurora.

"The summer blend is a cleaner-burning fuel for the hotter months, which is mandated for gas emissions," Mosher said.

And if that isn't enough, the economy plays another pivotal role. Uncertainty in the market always plays havoc with the price of a barrel of crude oil, said Jack Ablin, chief investment officer for Harris Bank.

"A year ago, crude oil went up, but gasoline went down because people just didn't want to pay for it," Ablin said. "But this time, oil and gasoline are in lock-step."