Gasoline prices have reached unprecedented levels in Northern California, up an average of 13 cents a gallon in the last month, a new survey says. The report from the California State Automobile Association shows that the cost of a gallon of gas has crept past $2 for the first time. On average, drivers pay $1.98 a gallon for self-serve in the upper half of the state, passing last July's record $1.88.

Severin Borenstein, director of the energy institute at University of California at Berkeley, says plans to lower the price by slight boosts in oil production will not have a big effect. The only way to reduce prices is to produce significantly larger amounts of oil and increase California's refinery capacity - both of which he says are unlikely events.

Near-record oil costs of around $35 a barrel and strong consumer demand are driving the price increase, which comes as a surprise in the usually lower-prices post-holiday driving season.

With inflation accounted for, prices are at their highest since 1981, when President Reagan ended price controls on the oil industry and gas prices rose to $1.38 a gallon - $2.30 a gallon in today's dollars.

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