Consumer

CBS 2's Kristyn Hartman and Mike Parker contributed to this report.
CHICAGO (CBS) ― Chicagoans are now paying the highest gas prices in the nation: $3.59 per gallon on average. That's way up from last year at this time, when drivers were paying about $2.98 a gallon in Chicago.

That's also well above the national average of $3.19 a gallon.

But one state senator says he has a money-saving plan to help get prices under control.

For many drivers the current situation seems like painful deja vu. We ask ourselves: haven't we said prices are out of control before? The answer is yes, almost every year for the past seven. But one lawmaker now hopes to ease that pain, at least a bit.

Hinsdale's Republican state Senator Kirk Dillard believes there's no relief in sight, which is why he is proposing Illinois lose the state gas sales tax, for good.

"Our gas prices are so out of whack with every other state around us that it's worth the gamble," Dillard said. "Especially now that we're facing huge electric rates, double digit electric rates over the summer, it's the least the state of Illinois can do."

Dillard says eliminating the gas sales tax could save drivers about 16 cents a gallon, immediately He points out the current five percent sales tax exists alongside the state motor fuel tax, which already costs drivers another 18 cents a gallon.

So Dillard believes one of them should go, and doesn't think it will hurt the cash-strapped state.

"It's an easy thing. We'll more than offset the loss of any revenue with increased gasoline purchases that people would have made in other states," he said.

This is similar to a move made in 2000 when lawmakers temporarily repealed the gas sales tax. Back then fuel was around a $1.80 a gallon.

The move was controversial then. It's not clear how it will be received now.

Dillard plans on discussing his proposal with fellow lawmakers this week, and urges the governor to consider the repeal.

Calls to Governor Rod Blagojevich's spokespeople were not returned Monday night.

Various Factors Pushing Prices Ever-Upward

As CBS 2's Mike Parker reports Chicago gas prices officially became the most expensive in the country Monday. A big reason for the city's unfortunate distinction is laws that mandate use of a more expensive pollution-fighting gasoline blend in Chicago during warmer weather.

The city gets most of it from a huge refinery in Whiting, Ind., and there are equipment problems there.

"And they can't stay online," said oil industry expert Phil Flynn. "They're running at a reduced rate, which is tightening up the supplies, especially in the Chicago area. That in turn has been driving up the price of Chicago gas."

Another reason for steep prices is that U.S. petroleum inventories are at record lows, but oil companies also blame higher demand. But the U.S. Department of Transportation says drivers actually logged fewer miles than usual over the last three months.

A few months ago one oil company president defended high profits linked to high prices.

"The profits are high because the crude price is high and the cost of producing that crude has not materially changed. Future investments cost more money," John Hofmeister, president of Shell Oil said in December.

Prices could get even more painful in the months ahead. Some experts say we could be paying an average of $4 dollars a gallon before long. Some stations around Chicago are already selling a gallon for that much.

Motorists obviously have a somewhat different view. "Gas prices right now are ridiculous," commuter Adrienne Gordon said Monday. "We were just talking about this the other day. Gas prices used to be 99 cents. Now it's $3.55. It's like a McDonald's meal for a gallon of gas."

Gordon said gas prices have changed the way she lives; most notably, she takes shorter trips and doesn't do as much.

If you're wondering where the lowest priced gas is in the country, it's Charleston, S.C., where the average gallon of regular unleaded is $2.87.

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