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Pain at the pump

From Mary Snow
CNN

YOUR E-MAIL ALERTS

Wolf Blitzer Reports
Oil and Gas

NEW YORK (CNN) -- The summer driving season hasn't kicked in yet and demand is already pushing prices at the pump toward new highs, with the average gas price at $2.21 a gallon, up 8 cents from two weeks ago. On top of that, crude oil hit a new record. While there might be differences in opinion on how high prices will go, experts agree that consumers shouldn't expect relief anytime soon.

Amir Hashemi says he avoids driving when he can, takes the subway and cuts back on his food bills, all to keep his gas tank full.

"I'm losing money. I'm losing about $30 every day to gasoline," Hashemi says.

At one gas station in New York, prices are reaching as high as $2.63 a gallon.

Across the country, the average price of self-serve regular is $2.21 a gallon. The Lundberg Survey found the cheapest gas in Charleston, South Carolona, at $2.04 and the highest average in Honolulu, Hawaii, at $2.46.

Experts like oil tycoon Boone Pickens see gas prices going one way -- up.

"You have gasoline in Europe at $5, and in the United States at $2.20. Eventually, it's going to have to move up. ... I do think you're going to see gasoline prices move up to $3 within a year from now," Pickens says.

The question is: Will prices ease and how?

"At a certain price, Americans say, 'Okay, I'm not going to drive anymore' or, 'This is getting too expensive to heat my home this way. I have to switch to another fuel.' ... When that does happen, demand will curtail and prices will retreat," says Eric Bolling, independent NYMEX Trader.

But energy analysts don't see that happening anytime soon. They say demand is only growing and they point to oil.

Crude oil hit another record high, topping $60 a barrel.

Adding to worries, oil traders are concerned that Iran's election of a hard-line government may result in tightened oil supplies.

"This market has been like a firecracker out in the sun. It's waiting to explode and this Iranian issue was the issue that made it blow through that area today," says Phil Flynn of Alaron Trading Corporation.

Some experts believe oil could hit $100 a barrel.

Until then, drivers like Leroy Fraizer have to pump and bare it.

"To fill my tank up, it costs me $47 to $48 and on a fixed income, that hurts. It totally hurts," says Frazier says.

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