Gasoline price jump greets new year drivers

Norm Knott drives about 475 miles per week, so even the slightest increase in gasoline prices can have an impact on the Dunlap, Tenn., resident.

"I look for the better price, better gas stations, discount cards, whatever you can do to help alleviate some of the cost," said Mr. Knott, 52, a Chattanooga mail carrier.

Gas prices in Tennessee increased 10 cents in the last month, while they shot up 13 cents in Georgia. In Tennessee, the average for regular gasoline went from $2.51 to $2.61 a gallon, according to the AAA Fuel Gauge Report.

But the region continues to have below-average prices, AAA reports. Nationwide, the average is $2.72 a gallon. In some places in the South, such as Florida, it's $2.76.

Severe weather is one reason the year started with higher gas prices -- $1 a gallon more than last year at this time, said Jessica Brady, AAA Auto Club South spokeswoman.

While gas prices remained relatively flat from Dec. 21 through Jan. 1, crude oil was trading at higher prices because of increased demand for natural gas and heating oil, she said.

"This past week, retail gasoline prices have actually caught up where they would have typically been had they increased along with the price of crude oil," she said.

Ed Canler, an economist who drives from Chattanooga to Dalton, Ga., at least four times a week, said he changed from his Honda CRV sport utility vehicle to a VW Jetta diesel to save fuel and help the environment.

"I project I'm going to save between $1,000 and $2,000 a year just on gas money," he said.

His Jetta gives him 43 miles per gallon on the highway, he said. The CRV is rated at about 28 mpg on the highway.

Looking ahead, Mr. Canler said he thinks gas prices will again rise to more than $3 a gallon by the end of next year because of rising global demand.

In 2008, gas prices increased to a record of more than $4 a gallon in most of the United States, including Tennessee and Georgia.

The value of the U.S. dollar also has contributed to the increases in gas prices, Ms. Brady said.

"Typically, when the U.S. dollar is stronger, it will push crude oil prices lower, but it wasn't until Thursday that the U.S. dollar strengthened," she said.

"So what we are hoping for is that when this cold weather starts to heat a bit, gasoline prices will start to drop -- as long as the U.S. dollar continues to strengthen," she added.

Mr. Knott isn't happy with higher prices but knows there's not much he can do.

"You just have to pay whatever it is," he said. "I hate it, but what are you going to do about it?"

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