Pump Prices Ease for Second Straight Week

Phoenix, Ariz., July 17, 2008 – Across the state, motorists are beginning to experience slight relief at the pump as fuel prices inch downward for the second straight week. Statewide, drivers are currently paying $4.058 for a gallon of regular unleaded gasoline, a drop of just over two cents from last week. Tucson drivers continue to hold on to the state’s lowest fuel price at $3.829 per gallon, while Flagstaff drivers are paying the most to fill their tanks at $4.238 per gallon. Nationwide, the current average is $4.114 per gallon, an increase of just under a penny from last week.  

This week, crude oil experienced a three-day price reversal as demand continued to lessen for the commodity and subsequently high-priced gasoline after the Department of Energy reported a rise in inventories, Federal Reserve Chairman Ben Bernanke issued a warning to the Senate Banking Committee on the impact high fuel prices are having on U.S. household’s purchasing power and the Organization of the Petroleum Exporting Countries (OPEC) lowered its forecast for world oil demand growth for 2008. OPEC’s new forecast represents a decline of 70,000 barrels from its earlier estimate. As a result, oil prices tumbled in the last few days by over $10 per barrel.

“Oil prices have fallen substantially over the last three days and many motorists are wondering why they are not seeing the immediate effects at the pump,” said AAA Arizona Public Affairs Manager Linda Gorman. “First, it is important to consider that while oil prices have fallen, it is still too soon to call this a trend as the market remains volatile and prices could fluctuate in either direction. Secondly, gasoline retailers are still recouping losses they have incurred before they are able to pass along relief to consumers by the way of cheaper fuel. In the recent price hikes, oil companies—not retailers—have reaped the financial windfalls. If oil prices continue their downward trend, fuel prices should further stabilize or drop slightly in the coming weeks. ”

The cheapest gasoline in the continental United States is in South Carolina, where unleaded regular is $3.909 per gallon. California drivers are paying the most for fuel in the country at $4.494 per gallon.

Motorists can visit www.AAAAZ.com/news/fuelnews.htm for fuel price information and gas saving tips or go to www.AAA.com/fuelfinder to locate the station with the cheapest gas in their neighborhood. They can also visit AAA’s Fuel Cost Calculator at www.fuelcostcalculator.com, which can help drivers plan out their fuel costs so they can budget their travel expenses in advance.

From now through September 30, drivers can also go to www.aaa.com/sweepstakes, visit a local AAA office or call 1.866.298.1232 to request a new insurance quote from AAA to receive a $10 gas card from AAA Insurance and be entered into the grand prize drawing of $20,000 in free gas. Those requesting a quote will also be entered into a monthly drawing to win $1,000 in free gas.

*Indicates record price.

 **The BTU-adjusted price of E-85 is the nationwide average price of E-85 adjusted to reflect the lower energy content as expressed in British Thermal Units - and hence miles per gallon - available in a gallon of E-85 as compared to the same volume of conventional gasoline. The BTU-adjusted price calculated by OPIS and AAA is not an actual retail average price paid by consumers. It is calculated and displayed as part of AAA's Fuel Gauge Report because according to the Energy Information Administration E-85 delivers approximately 25 percent fewer BTUs by volume than conventional gasoline. Because "flexible fuel" vehicles can operate on conventional fuel and E-85, the BTU-adjusted price of E-85 is essential to understanding the cost implications of each fuel choice for consumers.

AAA Arizona’s Weekly Fuel Gauge includes data from gasoline stations in every Arizona community. However, only major metropolitan areas are shown in the table above.  Local prices in some communities might be higher or lower than the averages shown here.

NOTE: AAA Fuel Gauge data may be used on a daily basis by news media Web sites, but should include attribution to AAA.