That's the highest ever for this time of year. Pump prices have risen an average 52 cents this year as refineries and wholesalers pass along the higher cost of crude oil. And this month they're getting an additional boost as investors bet that supplies will shrink ahead of the summer driving season.
It's an easy bet to make, independent commodities trader Jim Ritterbusch said. Supplies tend to fall in April as refineries sell off their existing gasoline inventories to make room for a different blend that's required in the summer. And driving tends to go up in the summer as schools go on vacation.
"Every year between March and May, you have a lot of people buying into this market," Ritterbusch said. "They're trying to stay ahead of the crowd" and buy gasoline while it's still relatively cheap.
The Oil Price Information Service says gas prices could rise as high as $4.25 per gallon. Prices will likely peak in late April, then fall through the summer as gasoline markets look ahead to a slowdown in travel during the fall.
Already drivers in several states including Illinois, New York, Michigan, Connecticut, Oregon, Washington and the District of Columbia are paying prices around the $4 mark. California drivers are paying an average of $4.36 per gallon.
Drivers in Hawaii are paying the most at $4.44 per gallon, while those in Wyoming are paying the least at $3.30 per gallon. Prices vary throughout the U.S. due to differing state taxes, transportation costs and other regional expenses.
The recent jump in prices has made gasoline a major topic of debate during the presidential campaign. Republican candidates have criticized President Obama for not doing enough to keep prices under control. Obama has countered that Republicans are ignoring steps his administration has taken to increase energy security, and that they're offering unrealistic solutions to a global pricing problem.
In his weekly address, Obama said over the weekend that domestic oil production has increased to an eight-year high under his watch. He also stressed that America must find ways to reduce oil consumption - not simply drill for more.
"With only 2 percent of the world's oil reserves, we can't just drill our way to lower gas prices," Obama said. "Not when we consume 20 percent of the world's oil."
Oil prices fell Monday after Chinese trade data suggested a weakening global economy. China reported a slowdown in growth in both imports and exports in its February trade data over the weekend.
Benchmark West Texas Intermediate gave up $1.06 to end at $106.34 per barrel in New York. Brent crude fell by 64 cents to end at $125.34 per barrel in London.
Natural gas dipped to a new 10-year low, falling by 5.5 cents to end at $2.27 per 1,000 cubic feet. Natural gas prices have plummeted this year thanks to a recent boom in production and weak heating demand this winter.
In other energy trading, heating oil fell by 2 cents to finish at $3.24 per gallon and gasoline futures gave up nearly a penny to end at $3.32 per gallon.
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