Statewide Average Continues Record Climb for Fourth Straight Day

Phoenix, Ariz., March 13, 2008 – Across the state and country, motorists are continuing to see gasoline prices spiral upward and in most places, are paying more to fill up than they ever have before. After establishing new all-time highs for the last four consecutive days, Arizona’s statewide average for a gallon of regular unleaded gasoline is currently sitting at $3.191 per gallon, an increase of over eight cents from last week. Tucson drivers have reclaimed the state’s lowest fuel price at $3.109 per gallon, while Flagstaff drivers continue to pay the most to fill their tanks at $3.320 per gallon. Nationwide, the current average is $3.267, which is also a jump of over eight cents since last week.

In its weekly report, the Department of Energy stated that gasoline inventories are above seasonal averages while demand is at its lowest level in 14 months. Despite this news, crude oil has continued to reach new highs and is currently trading in the $109 per barrel range.

“We are currently experiencing a bit of an anomaly right now as the current spike in pump prices is not being driven by demand or tight inventories,” said Linda Gorman, public affairs manager for AAA Arizona. “Rather, gasoline prices are surpassing their record highs as a result of rising crude prices, which have experienced unprecedented levels of investment against the weak dollar and other commodities. Unfortunately, it is difficult to know when the market will shift and crude’s current run will lose steam. Until that occurs, fuel prices are likely to continue their record climb.”

Paying record prices to fill up often leads motorists to having questions about Arizona gasoline prices. As a result, AAA Arizona would like to offer answers to four commonly asked questions about Arizona gas prices:

What do consumers pay for in a gallon of regular unleaded gasoline?

• Cost of crude oil to refiners, refinery processing costs, marketing and distribution costs and retail station costs and taxes. Federal, state and local taxes typically make up 15 to 20 percent of the cost alone.  

 Why do fuel prices vary throughout Arizona?

• To meet federal air quality standards, metropolitan areas are required to use special blends of gasoline during summer months. The summer blend of fuel is cleaner burning and more expensive to produce, which is one of the reasons gas prices typically begin to rise when the switch to this blend of fuel is made each May.
  
  
• Areas outside of metropolitan hubs use conventional gasoline year-round yet generally see fuel prices rise in the spring and summer months as well as a result of refineries producing less conventional fuel in order to produce cleaner burning blends of fuel for metropolitan areas of Arizona and throughout the country, which results in tighter supplies.
  
  
• Transportation costs also weigh in to fuel pricing. It costs more for fuel to be delivered to outlying areas of the state as opposed to metropolitan areas. Those costs are passed along to the consumer by the way of higher fuel prices.  

What determines how much gasoline stations charge for fuel?

• Where a station is located plays into the picture, as areas with higher rent or property values can result in prices being higher per gallon.
  
  
• Whether a station is independently owned or not can influence prices, as stations that are owned by oil companies may actually have little control over their pricing. Independently owned stations, or those that sell unbranded gasoline may have more control over pricing, but they may also have less access to finished gasoline.
  
  
• Stations that sell more products inside of their stores are also able to offer fuel for less, as are able to make their profit from the merchandise sold inside of their stores as opposed to fuel.

Is there anything consumers can do about record breaking gas prices?

The best way for motorists to cut back on their fuel costs is to curb their fuel consumption. One way to do this is to follow the below conservation tips:

• Shop around. Visit www.AAAAZ.com/news and click on “Fuel Price Finder” to locate the station with the cheapest gas along your commute route.
  
  
• Plan ahead. Use AAA’s Fuel Cost Calculator tool at www.fuelcostcalculator.com in order to budget your travel expenses in advance.
  
  
• Join a carpool, rideshare or telecommute. By doing this one day a week, you can reduce your fuel consumption by as much as 20 percent.
  
  
• Follow the speed limit.  Driving any faster may get you where you want to go in less time, but it also means more trips to the gas pump. Driving 75 mph instead of 65 mph will lower your fuel economy by 10 percent. Driving 70 mph instead of 55 mph will lower your fuel economy by 17 percent.
  
  

• Travel light. Less weight means better mileage. A heavier vehicle uses more gasoline.
  
  
• Take care of your vehicle. A simple measure such as keeping tires properly inflated can increase gas mileage by as much as two percent.

The cheapest gasoline in the continental U.S. is in New Jersey, where unleaded regular is $3.026 per gallon. California drivers are paying the most for fuel in the country at $3.609 per gallon.

 **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.