Summer gasoline use to drop 1st time since 1991

By Tom Doggett

WASHINGTON (Reuters) - U.S. summer gasoline demand will shrink for the first time since 1991 as skyrocketing pump prices and the wider economic malaise hit holiday plans, the Energy Information Administration forecast on Tuesday.

With some regions seen facing the shock of $4 a gallon gasoline this summer, fuel demand could contract 0.4 percent from 2007 as cars and gas-guzzling SUVs spend more time in driveways and less on highways.

It would be the first decline in summer gasoline use since a recession choked the U.S. economy 17 years ago. Many analysts forecast that this year's housing crisis, credit crunch and high oil prices could cause an economic retraction.

"The economy did have a slight recession in 1991, so that's one similarity between that year and this (year)," said EIA administrator Guy Caruso. "We are projecting a small recession for the first half of the year," he said.

Meanwhile, several U.S. senators urged the Federal Trade Commission to prohibit manipulation in petroleum markets.

"Record energy prices and industry profits are coming at a time when supply and demand suggest that prices should be significantly lower," said Sen. Olympia Snowe, Republican of Maine.

Even though gasoline inventories hit a 15-year high on April 1, the EIA forecast record gasoline prices, citing expensive crude oil. The agency said crude should average $97 a barrel this summer, up $30 from last year.

Gasoline prices will peak in June at an average $3.62 a gallon, the EIA predicted, with an average of $3.54 for April-September, up 61 cents from the previous driving season.