New York, NY (Reuters): The average price of a gallon of gasoline hit a new record this week and could surge even more as demand for the fuel rises this summer, according to an industry analyst. U.S. average retail gas prices rose to $3.6245 a gallon on May 2, up about 15.08 cents per gallon in the past two weeks, according to the nationwide Lundberg survey of about 7,000 gas stations.

In the past month, gasoline prices have increased more than 30 cents. Survey editor Trilby Lundberg said they needed to rise roughly 30 cents more to avoid a gasoline shortage this summer.

“The painful free market reality is that the price has to rise substantially now or rise far more later this year due to tight gasoline supply,” Lundberg said.

Refiners, who process crude oil to make gasoline, have been battered by slim margins for the past six months as they struggled to pass on record crude oil prices to consumers.

Many have mothballed refineries in response to the weak margins. Lundberg said prices needed to move higher to bring some of this refining capacity back on line, as well as bring in more imported gasoline.

This extra gasoline is especially important, Lundberg said, as next month is the beginning of the “summer driving season” — historically the period of highest gasoline demand.

Crude oil prices have risen to a record of nearly $120 a barrel this year, keeping gasoline prices high. Also adding to the fuel’s price are regulatory mandates calling for increased levels of ethanol to be added to gasoline.

At $3.95 a gallon, San Francisco had the highest average price for retail gasoline in the survey, which focuses on metropolitan areas. The lowest price was $3.39 a gallon in Cheyenne, Wyoming.

Trucking companies are also paying more for their fuel, which could seep through to the prices consumers pay for a range of transported goods.

The average U.S. diesel fuel price rose nearly 8 cents a gallon to $4.2911 per gallon. The cost of diesel is up more than 80 cents this year, Lundberg said.

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