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RVDA Confab to Offer Panel on Fuel Prices

June 30, 2011 by · Leave a Comment 

Chief economist John Felmy of the American Petroleum Institute (API) will explore the various factors that affect fuel prices and help dealers navigate the issue of volatility in the oil market during a special panel discussion at the 2011 RV Dealers International Convention/Expo at the Rio All-Suite Hotel & Casino in Las Vegas.

The convention is sponsored by the Recreation Vehicle Dealers Association (RVDA), RVDA of Canada, and the RV Learning Center.

Tom Walworth of Statistical Surveys Inc., the RV industry’s retail sales scorekeeper, will moderate the panel, titled “Future Fuel Prices – What You Need to Know” on Oct. 6. Dealers will get valuable perspectives on how to address the fuel price issue with their employees and customers as well as learn the real impact of oil prices on consumers’ household budgets.

RV dealers John McCluskey of Florida Outdoors RV Center in Stuart, Fla., and Bill Redmond of Bucars RV Centre in Calgary, Alberta, will join the panel to provide the RV retailer’s perspective.

“Top management at dealerships needs to be able to understand the impact of the oil markets on the RV industry and communicate the real story as fuel prices go up and down,” says RVDA Convention/Expo Committee Chairman Peter Albano of American RV in Olive Branch, Miss. “This session will give us the tools to separate fact from fiction when it comes to the fuel price issue.”

As chief economist, Felmy is responsible for overseeing economic, statistical, and policy analysis for API. Felmy is a member of the American Economics Association and the International Association for Energy Economics. API is the national trade association that represents America’s oil and natural gas industry. Its members are producers, refiners, suppliers, pipeline operators and marine transporters, as well as service and supply companies that support the industry.

Themed “ReVolution: Take Charge Today,” the convention will feature new, in-depth super sessions covering the top issues RV dealers and their employees are facing. The education program will include information on building sales through innovative marketing strategies that reach new customers and an overview of the short and long-term trends that will affect the RV industry.

To make the convention as affordable as possible, the registration fee for dealership employees is the same as last year. Register by Aug. 6 for special early-bird rates.  RVDA is also offering special registration plans including an “Easy Pay” plan of four payments. Companies interested in sponsorship opportunities and exhibitor information can contact RVDA at (703) 591-7130, ext 103, or send an e-mail to scharter@rvda.org.

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RVIA’s Offering Facts to Fuel Price Questions

May 12, 2011 by · Leave a Comment 

RVIA counters gas price myths

RVIA counters gas price myths

With gas prices continuing to climb through the spring, the Recreation Vehicle Industry Association (RVIA) has collected positive data and RV travel savings information for industry members to use in responding to media questions that may be asked in the coming months.

With the onset of the summer RV travel season, these facts are also suitable for consumer marketing communications, according to an RVIA news release.

The information will continue to be updated as RVIA conducts future research and gathers more data.

Please visit RVIA.org for the most up-to-date version or contact Kevin Broom in RVIA’s Public Relations department at (703) 620-6003 (ext. 304) or kbroom@rvia.org.

  • RV travel is a great value. The PKF Vacation Cost comparison study shows that a family of four can save 26-to-71% on vacation costs depending on the type of trip and type of RV used. More than 80% of RV owners say their RV vacations cost less than other forms of vacation.
  • The latest Campfire Canvass survey of RV owners reveals that 53% intend to use their RVs more this spring/summer despite higher fuel prices. Another 38% say they’ll use their RVs the same amount.
  • Many RV owning families plan to take shorter but more frequent trips in their RVs. Sixty-three percent plan to spend five or more weekends in their RVs this spring/summer; 19% will reserve a seasonal site at a campground this summer and visit it on weekends.
  • When fuel prices rise, RVers adjust by traveling to destinations closer to home, driving fewer miles, and staying longer in one place, according to surveys of RV owners conducted by RVIA and CVENT, a leading provider of online surveys and research technology.
  • More than 80% of RVers say their RV vacations cost less than other forms of vacation, even when fuel prices rise.
  • To save on fuel, RVers typically spend more time enjoying the campground experience and less time on the road. More than 16,000 campgrounds nationwide give RVers the flexibility to save fuel and cut costs by staying closer to home. Whether they travel five miles or 500, they can still enjoy a great outdoor experience.
  • Fuel prices would need to more than double from their current level to make RVing more expensive for a family of four than other forms of travel, according to PKF Consulting. PKF’s spring 2008 vacation cost comparison study shows that RV trips remain the most affordable way for a family to travel because of the significant savings on air, hotel and restaurant costs, which continue to rise.
  • Fluctuating fuel prices affect the cost of all modes of travel and transportation. Airfares and hotel rates rise rapidly when fuel costs increase.
  • Many RV owners surveyed take additional measures to reduce fuel consumption through simple steps like driving 55 instead of 65 mph, packing lighter to reduce weight in the RV, and turning off home utilities to save energy when traveling. RVers travel at a leisurely pace with no tight schedules for flights, hotels or restaurants.
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44% Favor Eliminating Federal Gas Tax Now

May 9, 2011 by · Leave a Comment 

Voters strongly believe the government can do something to lower rising gas prices, but they have mixed feelings about dropping the federal gas tax.

A new Rasmussen Reports national telephone survey finds that 44% of American Adults say the government should eliminate the federal gasoline tax until prices at the pump come down. But 35% disagree and say the government should not eliminate this tax. Twenty-one percent are not sure.

In early April 2008, the last time gas prices soared, 60% of Americans believed the federal tax on gasoline should be suspended until prices went down.

The federal excise tax on gasoline is 18.4 cents per gallon for regular.

With gas prices nearing record highs, an overwhelming majority (67%) believe the government has the power to lower these prices in the short-term. Fourteen percent don’t share that assessment, and 19% are undecided. The question did not specify what kinds of things the government might be able to do.

Thirty percent of Americans, however, blame government regulations for the high gas prices. Thirty-four percent (34%) say oil speculators, those who buy and sell large quantities of oil on international markets, are more to blame. Sixteen percent (16%) say the unrest in the Middle East is the chief cause of the high prices. Thirteen percent think something else is to blame.

The survey of 1,000 adults nationwide was conducted on April 30-May 1, 2011 by Rasmussen Reports. The margin of sampling error is +/- 3 percentage points with a 95% level of confidence. Field work for all Rasmussen Reports surveys is conducted by Pulse Opinion Research LLC.

Women favor temporarily dropping the gas tax more than men do. Adults who earn less than $40,000 like that idea more than those with higher incomes.

Investors are less confident than non-investors that the government can do something in the short term to lower gas prices. Fifty-three percent of non-investors support temporary elimination of the federal gas tax, but investors are narrowly divided on the question.

While 55% of Republicans believe the government should eliminate the federal gas tax until prices come down, just 39% of both Democrats and adults not affiliated with either political party agree. But two-out-of-three adults in all three groups share the belief that the government can do something to lower gas prices in the short term.

Fifty percent of Republicans think government regulations are to blame for high gas prices, compared to 16% of Democrats and 21% of unaffiliateds. Democrats and unaffiliated adults tend to blame speculators.

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Weak Dollar Sending Gasoline Prices Upward

April 25, 2011 by · Leave a Comment 

Gas prices pass $4/gallon in Indiana.

Gas prices pass $4/gallon in Indiana.

A dollar plumbing three-year lows is hitting Americans squarely in the gas tank, and one economist thinks it could drive prices as high as $6 a gallon or more by summertime under the right conditions, CNBC.com.

With the greenback coming under increased pressure from Federal Reserve policies and investor appetite for more risk, there seems little direction but up for commodity prices, in particular energy and metals.

Weakness in the U.S. currency feeds upward pressure on commodities, which are priced in dollars and thus come at a discount on the foreign markets.

One result has been a surge higher in gasoline prices to nearly $4 a gallon before the summer driving season even starts, a trend that economists say will be aggravated as demand increases and the summer storm season threatens to disrupt oil supplies.

“All we have to have is a couple badly placed hurricanes which could constrain some of the refinery output capacity in some key locations,” says Richard Hastings, strategist at Global Hunter Securities in Charlotte, N.C. “If you get weakness in the dollar concurrent with the strong driving season concurrent with the impact of one or two hurricanes in the wrong place, prices could go up in a quasi-exponential manner.”

Using a model that combines “subtle rates of change” with movements in the dollar index and commodity prices, Hastings figures the low dollar is responsible for about one-third, or $1.31, of the total gas-at-the-pump cost. Regular unleaded on April 20 was $3.84 a gallon nationwide, according to AAA.

While there’s far from unanimity about the dollar’s future course, the proportionate contribution that currency weakness makes to oil prices is clear.

The dollar as measured against a basket of foreign currencies has dropped 6% this year, while regular unleaded gasoline is up about 28%.

Gas prices also have been boosted from turmoil in the Middle East which in turn has triggered a wave of speculation that traders estimate has added about $15 or so to the cost of a barrel of crude , which is now teetering above the $110 mark.

Hastings sees gasoline having “no problem” getting to $6.50 a gallon over the summer after increased demand and storm disruptions come into play.

Others, though, say gasoline prices haven’t needed any help so far from other events — the moves by the Fed to keep interest rates in negative real terms are enough to boost energy by themselves.

Michael Pento, senior economist at Euro Pacific Capital in New York, says there is an almost perfect negative correlation between the falling dollar and oil prices — minus-0.9 to be exact.

“When you have negative correlations that strong, it’s not hard to understand that the reason why we’re having this price spike in commodities is primarily because of the weaker currency and not because of shortages of oil or international tensions or global growth,” Pento says.

The assertion from Hastings that the weak dollar is responsible for one-third of the total cost for a gallon of gas “sounds very low,” Pento says, adding that a barrel of oil should be closer to the $65 to $70 range if priced properly.

“That’s exactly where it would be if we weren’t crumbling our currency,” he says.

Should events follow their current course, sharply higher gas prices will burden consumers further as they also cope with the rise in food costs this year.

Hastings projects the dollar index to test 72 at some point—another 3% drop — while Peter Cardillo, chief economist at Avalon Partners in New York, sees the dollar dropping to the 73.50 level.

“The global economy is quite strong, and the weak dollar is basically fueling even higher energy prices. That’s not transitory,” Cardillo says. “Gas prices in the Northeast are over $4 a gallon. How could anyone say that’s not a burden?”

Note: Gas prices in several areas of Indiana have blown through the $4 per gallon mark, Indiana INdiana Business reported today. The website indianagasprices.com reports the highest prices is nearly $4.40 at a station in Merrillville. Indiana’s NewsCenter report the cost has hit $4.17 at some pumps in Fort Wayne.

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Researcher Sees Chance for Lower Fuel Prices

April 13, 2011 by · Leave a Comment 

Photo courtesy of Inside INdiana Business

Photo courtesy of Inside INdiana Business

The director of research at Ball State University’s Center for Business and Economic Research in Muncie, Ind., is suggesting gas prices could drop quickly once the turmoil in north African and the Middle East calms down.

Dagney Faulk says the political unrest is the key factor in driving up the cost of crude oil, which is forcing the price at the pump to reach $4 per-gallon throughout Indiana, Inside INdiana Business reported.

Members of the Indiana Senate this week passed a resolution encouraging the U.S. to import more oil from Canada instead of the Middle East.

The resolution refers to a U.S. Department of Energy study that finds growing Canadian oil sands importation by the U.S. has to potential to substantially reduce dependency on non-North American sources.

It also points to oil companies making commitments to upgrade and expand refineries in the Midwest to make gasoline from Canadian oil derived from tar sands.

The includes the massive upgrade at the BP Refinery in Whiting, Ind.

But Faulk says importing more oil from Canada, is not likely to be a long-term solution.

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Americans Weigh Options: Gas Hits $3.52/Gal.

March 10, 2011 by · 2 Comments 

Gas prices could take a bite out of the travel market if  American families pull back on spring and summer road trips, CNN reported.

On average, Californians were paying $3.92 a gallon Wednesday, 40 cents above the national average of $3.52, according to AAA’s daily report.

Back East, gas prices haven’t cut into strong demand yet at Seralago Hotel & Suites in Kissimmee, Fla., three miles from family travel magnet Disney World. Bookings right now are better than last year as the economy starts to brighten, said general manager Jan Rietveld.

But if fuel prices stay high and continue to rise, he said he expects business to drop a bit as people tailor their plans to suit their budgets.

“If they normally would take a long trip, they go closer in,” he said.

Staying closer to home is exactly what some travelers did during the summer of 2008 when fuel prices reached record highs, said AAA national spokesman Troy Green. Still, Americans have a strong desire to travel, and those who book months in advance are likely to go, possibly cutting back on spending for lodging, dining or incidentals, Green said.

AAA won’t issue a travel forecast until a few weeks before Memorial Day. In the summer of 2008, the automobile club forecasted a slight decrease in travel for Memorial Day, July Fourth and Labor Day due to economic woes and gas prices hovering around $4 a gallon that July.

For now, Rietveld and other industry professionals are feeling good about spring break.

Panama City Beach, Fla., is looking at a strong spring in the wake of the devastating oil spill last year. The oil disaster doesn’t seem to be affecting spring break travel at all, said Dan Rowe, president of Panama City Beach’s visitors bureau.

The popular Gulf Coast destination sees the arrival of hundreds of thousands of students as an opportunity to show the world that the oil is gone, he said.

Rowe said he’s hoping that gas prices don’t dampen the appetite for summer travel. The incremental increase per gallon for gas isn’t likely to add that much to the overall cost of a trip from most of the destination’s top markets in neighboring states, but lodging providers will be ready with incentives to ease travelers’ concerns if prices stay high into the summer, Rowe said.

In 2008, many local lodging companies offered gas gift cards and other added values.

“Anything we can do to make it easier for people to say, ‘Yes, I want to come to the beach,’ ” Rowe said.

In Tampa Bay, Fla., the Busch Gardens theme park is expecting a great year, said park president Jim Dean in an e-mail.

“We have not yet seen our attendance affected by rising gas prices,” he said.

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LeaseTrader.com: Consumer Change at $4/Gal.

March 1, 2011 by · Leave a Comment 

While muted panic over the current gas price increase stems from the 2008 price explosion, LeaseTrader.com believes drivers will continue to pump with current habits until the price exceeds $4 per gallon.

The nation’s most popular online car leasing marketplace, LeaseTrader.com is using data and models from 2008 that show when consumer behavior will turn to action, with drivers reducing fuel consumption and realizing they should downsize into a more fuel-conscious vehicle, according to a news release.

Since 2008 the auto industry has done an exceptional job engineering more fuel-efficient cars, but there are still plenty of large vehicles on the roads, many which were culprits just a few years ago. Economists are weary that rising gas prices could potentially toss a healing American economy back into recession depending how drastically gas prices spike.

Fuel prices reached a national average of more than $4 per gallon in the summer of 2008. Many drivers turned to LeaseTrader.com and exercised their option to transfer out of their SUV leases as they sought smaller, more fuel-efficient cars. These drivers transferred their leases to small businesses and families shopping for short-term contracts with enough room for work projects and growing families. Similar trends are expected this spring and summer depending on where the price of gas lands.

“The average driver goes through a series of psychological stages when gas prices rise,” said Sergio Stiberman, CEO and founder of LeaseTrader.com. “During the uptick, concerns and complaints heat up when we pass certain price benchmarks, but widespread behavior doesn’t actually change until we reach $4.00 per gallon.”

Car makers today produce more fuel-efficient cars and fewer Hummer-type vehicles that filled the roads in 2008. LeaseTrader.com again anticipates an influx of vehicle models for transfer, including the Chevy Silverado and Avalanche, Cadillac Escalade, GMC Sierra, Ford Expedition, Mercedes GL, and BMW X5.

About LeaseTrader.com

LeaseTrader.com, the most recognized name in car leasing, easily and affordably matches car shoppers with individuals looking to escape their auto lease. Visit www.LeaseTrader.com, on Twitter @Lease_Trader, or call (800) 770-0207.

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RVIA Providing Answers for Gas Questions

February 4, 2011 by · 1 Comment 

With gas prices on the rise, the Recreation Vehicle Industry Association (RVIA) has collected positive data and RV travel savings information to use in responding to media questions that may be asked of industry spokespeople in the coming months.

With the onset of the spring and summer RV travel season, these factoids are also suitable for consumer marketing communications.

The information will continue to be updated as RVIA conducts further research.

FUEL PRICES AND THE RV INDUSTRY

January 2011 – Fuel Prices: $3.10 per gallon

  • RV travel is a great value. The PKF Vacation Cost comparison study showed that a family of four can save 26% to 71% on vacation costs depending on the type of trip and type of RV used. More than 80% of RV owners say their RV vacations cost less than other forms of vacation.
  • While fuel prices remain well below their pre-recession high, prices are 36 cents per gallon higher than they were a year ago. When fuel prices rise, RVers adjust by traveling to destinations closer to home or driving fewer miles, according to surveys of RV owners conducted by RVIA and CVENT, a leading provider of online surveys and research technology.
  • More than 80% of RVers say their RV vacations cost less than other forms of vacation, even when fuel prices rise.
  • To save on fuel, RVers typically spend more time enjoying the campground experience and less time on the road. More than 16,000 campgrounds nationwide give RVers the flexibility to save fuel and cut costs by staying closer to home. Whether they travel five miles or 500, they can still enjoy a great outdoor experience.
  • Fuel prices would need to more than triple from their current level to make RVing more expensive for a family of four than other forms of travel, according to PKF Consulting. PKF’s spring 2008 vacation cost comparison study shows that RV trips remain the most affordable way for a family to travel because of the significant savings on air, hotel and restaurant costs, which continue to rise.
  • Fluctuating fuel prices affect the cost of all modes of travel and transportation. Airfares and hotel rates rise rapidly when fuel costs increase.
  • Many RV owners surveyed take additional measures to reduce fuel consumption through simple steps like driving 55 instead of 65 miles per hour, packing lighter to reduce weight in the RV, and turning off home utilities to save energy when traveling. RVers travel at a leisurely pace with no tight schedules for flights, hotels or restaurants.
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Gas Price Hike May Slow Indiana Economy

January 20, 2011 by · 2 Comments 

Gas price surge could hurt Indiana economy.

Gas price surge could hurt Indiana economy.

A significant jump in gasoline prices from the current $3 to $4 a gallon has the potential to slow Indiana’s economy, where the unemployment rate currently is about 9.8%, says a new Ball State University study.

“The Effect of Higher Fuel Prices on Indiana’s Economy,” a report from Ball State’s Center for Business and Economic Research (CBER) , finds that $1 per gallon and $25 per barrel price increases would depress economic activity by about 2%, increase the unemployment rate by roughly 1.3% and lower state tax revenues by about one half of one percent or about $68 million, according to a news release.

The study found that the ’07-’08 gas price increase came with a recession that preceded by 10 months of the September 2008 stock market decline.

In Indiana, the effect of higher gasoline prices was especially problematic in some regions due to the state’s concentration of automotive and recreational vehicle-related manufacturing.

Hicks notes that the last major layoff in Elkhart County in northern Indiana happened in August 2008, a full month prior to the collapse of Lehman Brothers and the sharp national increase in unemployment.

“There are projections that these price increases could occur by later this spring, and if so, we would have a repeat of a similar price surge that occurred from the summer of 2007 to summer of 2008, initiating the recession,” warned Michael Hicks, CBER director. “Fortunately, this effect will be less painful during an economic recovery than it was at the start of the last recession. But a gasoline price increase of this amount will slow the recovery in Indiana.”

“Any increase in gasoline prices today will have very similar effect,” he said. “While we are a nation in economic recovery, with a more fuel efficient vehicle stock than in 2007, the overall consequences of a similar gasoline price increase will be indistinguishable from the 2007-2008 period.”

Hicks points out that from June 2007 to June 2008, the average gasoline price in U.S. cities rose from $3.05 to $4.06. During the same period, the unemployment rate in Indiana rose from 4.5% to 5.6%.

While part of this increase could be attributed to a slowing of new home construction and higher interest rates — both factors in the bursting of the nation’s housing bubble — CBER’s analysis of monthly data from 1978 through the present finds that a $1 change in gasoline prices is associated with a 1.3% to 1.5% increase in the unemployment rate.

“Even with advances in energy efficient vehicles, public transportation and alternative fuels, we remain very dependent on petroleum and an increase in its price slows the U.S. and Indiana economies,” Hicks emphasized.


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Gasoline Prices Falling Ahead of Labor Day

August 30, 2010 by · Leave a Comment 

There is good news at the gas pump, as Americans get ready to fill their cars, RVs and boats for the Labor Day weekend, Associated Press reported.

The national average price for gasoline has been falling steadily this month, reaching $2.678 for a gallon of unleaded Monay (Aug. 30), according to AAA, Wright Express and Oil Price Information Service. That’s about 6 cents a gallon less than a month ago and 7 cents less than it was on the Friday before the July Fourth weekend.

West Coast drivers pay the most for gas — between $2.792 a gallon and $3.539 a gallon. The cheapest gas is in Texas, the Gulf Coast states and parts of the Midwest, where prices range from $2.431 to $2.523 a gallon.

A plunge in wholesale gasoline prices earlier this month is pushing down prices at the pump, PFGBest analyst Phil Flynn said.

The price drop comes as the summer driving season ends, and gasoline supplies remain nearly 12% above the five-year average with overall demand below pre-recession levels.

Most analysts believe retail prices will continue to fall into Labor Day weekend and continue to retreat in September.

“After the Labor Day weekend, the summer driving season is basically over. We’re going into the weakest demand period of the year,” Flynn said.

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