With gas prices still teetering around $4 a gallon, it might be logical to think gas costs would deter people from hooking up a camper to a vehicle or driving around in an RV as they embark on summer vacation, the DeKalb (Ill.) Daily Chronicle reported.
That’s not the case, Lisa Flanigan said.
Flanigan and her husband, Rick Flanigan, own Holiday Hour RV in Cortland, Ill., and summer sales have been steady despite gas prices.
Even some big, 30-foot campers have been moving off the lot in recent weeks.
“Camping is still a priority,” Lisa Flanigan said. “They’re not traveling as far, but people still want to get vacations in. Nobody wants to stay home.”
Even staff members at area campgrounds have noticed a steady stream of travel trailers and fifth-wheel RVs making their way through campsites.
Anita Cappel, who owns the Sycamore RV Resort in Sycamore with her husband, Dale Cappel, said campers still are vacationing this summer, though many might be staying closer to home.
Anita Cappel said most of their customers travel to the Sycamore RV Resort from out of state, and business is down about 15% this year.
“If it’s because of gas, that I’m not sure,” Cappel said. “But it probably is.”
In 2008, around the time gas prices were similar to today, Molly Haseman remembers people mentioning the high price of gas when they called to cancel a reservation at Shabbona Lake State Park.
Haseman, office coordinator for the park, said the park no longer takes reservations, so it’s a little more difficult to gauge what keeps people from visiting the campground.
Even with a higher cost of traveling by car, Haseman’s noticed more larger camping units peppering the campground this summer. But many campers who have a large RV in tow are coming from relatively local areas.
“In prior years, maybe they would have gone to Wisconsin,” Haseman said.
“I think that’s another impact (of gas prices).”
A survey conducted this spring by the Recreation Vehicle Industry Association (RVIA) showed more than half of RV owners planned to use their RVs more often during this camping season compared to last year.
Many of those surveyed indicated they likely would take more frequent weekend vacations and stay closer to home.
Of those surveyed, 68% said they expected fuel prices to affect their travel plans this summer, whether they plan to travel shorter distances or stay in one location for a longer period of time.
Flanigan said the camping industry isn’t deterred by gas prices because summer vacations still are important to families and flying somewhere is even more costly.
“For the cost to fly your family, you can own half a camper,” Flanigan said.
RV manufacturers also have been adapting to gas-price hikes, and Holiday Hour RV has been selling lighter travel trailers that can be towed by smaller vehicles. Flanigan said in most cases, an extra $1 per gallon of gas usually adds up to less than $50 more for a camping trip with a RV in tow.
Haseman said camping is a good getaway that doesn’t involve a lot of advanced planning, and most people don’t need to go far to enjoy the outdoors.
“We’re getting a lot of local people this year,” Haseman said. “Our primary camper has always been from the suburbs. That’s been our mainstay over the years.”
Though gas prices are making family budgets a little tighter, people are still leaving room for vacations – though gas prices might slightly alter their plans. Flanigan said even though many families have to stretch their dollars today, summer camping trips remain a staple in their lives.
“Because people’s lifestyles are so tremendously busy, I think it’s one of the best ways to relax,” Flanigan said. “People want to enjoy the peace and quiet and enjoy the outdoors.”
Four-dollar gas is quickly becoming a thing of the past, but not before siphoning billions from consumers and forcing the economy into low gear.
USA Today reported that after topping $4 a gallon in 17 states and threatening to surpass the all-time record of $4.11, reached in July 2008, regular-grade gasoline now averages $3.69. That’s 29 cents below May’s $3.98 high. Gas prices now average $4 only in Hawaii, Connecticut and Illinois and $4.24 in Alaska.
The slide in prices — linked to rising inventories and soft demand — could continue through summer, soothing fragile consumer sentiment and potentially boosting the sluggish economy.
Consumer spending accounts for more than two-thirds of the economy. With gas prices up $1 above year-ago levels, fuel will cost consumers $50 billion more in the first half of 2011 than they spent in the first six months of 2010, says Moody’s Analytics senior economist Matthew Sweet.
“When gas prices broke $4, you saw a lot of consumers hunker down. It definitely took some steam out of spending,” Sweet says. “It works the same way on the way down. Consumers will remain cautious, but as gas prices head toward $3.50, they’ll take it as a sign of relief and maybe spend a little more.”
Industry analysts are split over how low prices could fall — and for how long — before renewed U.S. and foreign consumption pressures prices.
Benchmark West Texas crude oil settled up $2.07 to $99.37 a barrel Tuesday on the New York Mercantile Exchange after falling 2% Monday to $97.30, the lowest since May 17.
Gas prices drops
Tom Kloza, chief analyst for the Oil Price Information Service, expects a near-term price drop to about $3.60 a gallon. “We’re still going to see fuel prices at 75 cents or so higher than last year,” he says.
Renewed fears of a European debt crisis, an extension of Wall Street’s six-week slide and perhaps an end to the civil war in oil-rich Libya could push prices lower, Kloza says.
Veteran energy trader Dan Dicker says gas prices could drop to about $3.50 a gallon if crude oil remains at or below $100 a barrel. “All else being equal, prices could continue to come down for the remainder of summer by Labor Day,” says Dicker, author of the recently released Oil’s Endless Bid: Taming the Unreliable Price of Oil to Secure Our Economy.
Patrick DeHaan, senior petroleum analyst at price tracker GasBuddy.com, also expects prices to fall near term, perhaps to as low as $3.15 a gallon in some regions of the country.
But DeHaan warns that an intense hurricane season, which runs through November, could play havoc with southern oil refineries and potentially push prices sharply higher.
The average U.S. price of a gallon of gasoline has dropped about 17 cents over the past three week, according to an Associated Press report.
The Lundberg Survey of fuel prices puts the average price for a gallon of regular at $3.74.
Analyst Trilby Lundberg said Sunday (June 12) that the national average for a gallon of mid-grade is $3.89. For premium it’s $4.00 a gallon.
Lundberg says diesel prices fell about 10 cents a gallon over the past two weeks, to $4.05.
Jackson, Miss., had the nation’s lowest average price for gas at $3.41. Chicago had the highest at $4.29.
In California, the lowest average price was $3.82 in Fresno, while San Franciscans paid the highest price at $3.96.
Gasoline prices hovering near $4 a gallon haven’t put the brakes on the desire of Greater Cincinnati and Northern Kentucky residents to hit the road in recreation vehicles, area dealers say.
Sales of RVs, ranging from small towable trailers to luxury mega buses, are holding their own or up slightly despite this year’s sharply higher gas prices, the Cincinnati Enquirer reported.
“Four dollar a gallon gas won’t stop somebody who wants to go camping,” says Greg Holman, co-owner of family owned Holman Motors in Batavia. “They just won’t go as far.”
Total RV shipments are up 6% through April, the most recent month available. Even the priciest Class A motorhomes, which can cost $100,000 or more, are up 12% this year compared to a year ago, according to data from the Recreation Vehicle Industry Association (RVIA), which represents manufacturers and suppliers.
More expensive motorhomes have retained their popularity with retirees and those approaching retirement – two groups that industry experts say typically have more income and can afford to operate RVs.
“What we’ve found is RV owners continue to use their them even when fuel prices rise, but they take shorter trips,” said Kevin Broom, spokesman for the Reston, Va.-based trade group.
“Instead of taking a cross-country trip to the Grand Canyon, they head to a nearby state park,” he said.
Towable trailers and campers represent about 80% of the market, he said.
Holman said his dealership decided to focus on towable campers exclusively several years ago because they offer owners more flexibility.
“If a working guy owns a truck, he drives it to work every day and on the weekends he can use it to tow his camper,” he said. “Motorhomes aren’t that practical.”
Although camping activity at the Hamilton County Park District’s three campgrounds is down so far this year because of the wet weather in April and May, last year was one of the best on record, said Bill Mowery, the district’s director of recreation services.
Camping rentals totaled 23,118 nights last year, up nearly 4%, from the prior year at the district’s three camping areas: Winton Woods, Miami-Whitewater Forest and Steamboat Bend on the Ohio River, east of Cincinnati.
Mowery said about 80% of the park’s campers come from a 20-mile radius of the county.
“Everybody complains about higher gas prices, but I don’t think it has big impact on people’s decision to buy one,” said Joe Finch, sales manager at Tom Raper RVs in Fairfield.
He said his dealership’s sales have been steady.
Consumer confidence and credit availability typically have a bigger impact on sales than gas prices, said Broom. “The industry took a big hit during the recession because credit wasn’t available,” he said.
Steve Jung, whose family has operated Colerain RV Sales in Colerain Township since 1968, said taking a trip in RV is a lifestyle decision for many folks.
Even though gas prices are up about $1 a gallon from a year ago, he said, for a RV getting about 10 miles to the gallon, that represents about $100 more for a 1,000-mile trip.
“Are you not going to take that trip for $100?” he asked.
Industry advocates say RV travel is less expensive for a family than flying or traveling by car and staying in hotels and eating in restaurants.
Summer driving season usually means gasoline prices are set to climb, but this year Memorial Day could mark the start of a significant drop in prices at the pump.
CNBC reported that gasoline hit $3.98 a gallon for the national average in mid-May and by Wednesday, it had dropped to $3.81, according to AAA.
“I think there are several trends pointing to $3.50 as the national price between now and July 4th,” Gulf Oil CEO Joe Petrowski said Wednesday on CNBC. Less demand is one factor. “Even at current prices, demand is down four to five percent, and we’re generally among the most competitive at the pump.” Gulf Oil has more than 2,500 branded retail gasoline stations in the U.S.
According to the U.S. Energy Information Administration (EIA), total motor demand has been relatively flat over the past month. Yet a MasterCard survey of retail gasoline demand found the four-week average has declined for nine consecutive weeks compared to the same period a year ago
Rising supplies are another factor helping to drive down prices. Gasoline inventories rose sharply last week, up nearly 3.8 million barrels, according to the EIA. Gasoline inventories have jumped by more than 5 million barrels in the past three weeks, ahead of the start of the summer driving season, a time when, historically, inventories are on the decline.
Storm-related power outages at several refineries and fears that rising Mississippi River flood waters would further impede gasoline production led to a price spike earlier this month. But oil and gasoline prices have come back down as those fears have abated and supplies have risen.
“It’s unusual to see retail gasoline prices dropping during Memorial Day weekend,” said OPIS energy analyst Tom Kloza. He expects prices to continue to fall over the next week. “Most of the $4 gas is going to disappear.”
The national average for regular gasoline is already at a five-week low ahead of the holiday weekend. Yet pump prices are still about a dollar higher than a year ago. In several states, including California and New York, gas prices average more than $4 a gallon.
But some consumers’ responses to high prices may continue to be to drive less and cut back on fill-ups. That may help gasoline prices come down even further.
Drivers have something worth honking their horns over: Summer gasoline prices likely will remain below $4 a gallon, a Purdue University agricultural economist said in a press release.
Market conditions that caused oil prices to shoot past $110 a barrel have improved in recent weeks, pushing oil back under $100 a barrel, said Wally Tyner, an energy policy specialist. He cautioned that pump prices could rise again if oil production is interrupted.
Memorial Day weekend traditionally marks the beginning of the summer driving season.
“If crude oil stays below $100 – meaning that there are no further production disruptions in the Middle East or elsewhere and we have no further weather conditions or other factors that cause refining outages – we have seen the worst,” Tyner said. “We can hope for steady or even somewhat falling prices over the next few months.”
Motorists have experienced severe gas pains this spring, with pump prices in some places topping $4.25 a gallon. Prices have soared for several reasons, Tyner said.
“First, there was the conflict in Libya that sent crude oil up about $15 per barrel,” he said. “That normally translates to an increase at the pump of about 40 cents per gallon.
“Shortly after that event, we had the change from winter to summer blend gasoline. That change occurs on May 1, and the impact is felt a bit before that as refineries and stations make the switch. Summer blends normally are about 10 cents per gallon higher than winter.”
Domestic oil refining also hit a snag. Refineries on the East and West coasts experienced outages, and excessive spring rain and flooding slowed barge traffic on the Mississippi River, affecting Gulf Coast refineries.
“The combination of these factors sent what are called ‘refining margins’ off the chart,” Tyner said. “Normal refining margins are about $12 per barrel. These events sent refining margins on average to about $23 for a short period, and up to $30 in the Chicago area. These extraordinary refining margins added another 26 cents or more per gallon at the pump.”
All told, these issues tacked on at least 76 cents to a gallon of gas, Tyner said.
Although crude oil prices have retreated, they are still higher than a few months ago, Tyner said. Refining margins are again in the normal range, but it will take time for those lower margins to be reflected in retail prices. Consumers will continue to pay the summer gas premium of about 10 cents per gallon, he said.
“What happened this spring is not likely to be repeated,” Tyner said.
The average U.S. price of a gallon of gasoline has dropped about 9 cents over the past two weeks, according to an Associated Press story.
The Lundberg Survey of fuel prices puts the average price for a gallon of regular at $3.91.
Analyst Trilby Lundberg said Sunday (May 22) that the national average for a gallon of mid-grade is $4.05. For premium it’s $4.16 a gallon.
Lundberg says diesel prices fell about 8 cents a gallon over the past two weeks, to $4.14.
Jackson, Miss., had the nation’s lowest average price for gas at $3.60. Chicago had the highest at $4.38.
In California, the lowest average price was $4.03 in Fresno, while San Franciscans paid the highest price at $4.17.
The thought of gassing up for a cross-country – or even crosstown – vacation is enough to unleash an expletive-filled rant worthy of Chevy Chase’s Clark W. Griswold.
According to a report in the Sacramento Bee, with fuel costs hovering around $4 a gallon, many motorists and recreation enthusiasts are rethinking and reworking spring and summer travel plans.
Count the Jones family of Citrus Heights among those cutting back. Gone are the days when this family of seven would pile into their Honda Odyssey van and go for a drive.
Julie Jones, 36, said the family will wrap their summer vacation in with a roughly 300-mile trip to San Luis Obispo to celebrate her grandparents’ anniversary.
“When we’re going down there, we’ll include vacation time in that instead of traveling somewhere else or at another time,” she said.
Consolidating trips and staying longer will be a common theme among summer travelers, judging from interviews with consumers and travel experts.
Forty percent of adults expect to take fewer trips in the next four months because of the cost of gasoline, and 74% of those surveyed expect to reduce the number of trips by at least two, according to a recent study by the global market research firm TNS Omnibus.
If gas prices stay high, people stay home, or close to it. Consequently, cities such as Sacramento will see a drop in tourism dollars, said Mike Testa, senior vice president of convention sales and business developments for the Sacramento Convention and Visitors Bureau.
“Sacramento is a drive-in destination,” he said. “Anytime you have higher fuel prices, it impacts the amount of distance travelers will come from.”
When gas prices shot up a few years ago over Labor Day weekend – right in time for Sacramento Gold Rush Days – the event was attended more heavily by locals than out-of-towners.
“If history is the model, I think where we’ll feel it most are on those three-day holidays –
Memorial Day, Fourth of July, Labor Day,” Testa said.
Spending by locals who decide against travel might soften the loss, but won’t completely cover it.
“Visitors typically spend more than a local would,” Testa explained.
When gas prices inch up, recreational vehicle owners also tend to seek destinations closer to home. In addition, they stay in one place longer and trim costs in other areas, said Debbie Sipe, executive director of the Auburn-based California Association of RV Parks and Campgrounds (CalARVC).
“They still end up going camping, but they buy the hot dogs instead of going out for a steak dinner,” she said. “They’re still going, but are spending money in different ways.”
Despite the recession and rising gas prices over the past few years, occupancy rates have held steady at about 55% to 60% at privately owned RV parks and campgrounds in California, she said.
Unlike other segments of the travel industry, which have seen double-digit downturns, camping has had almost no downturn in occupancy, she said.
“Americans feel that a vacation is a birthright, and they’re going to go. They’re just going to go with what they can afford,” Sipe said. “RVing and camping is an affordable alternative. … Plus, it offers good quality family time that you don’t necessarily get on other kinds of trips.”
Many Americans, fed up with being pent up, appear determined to go on vacation this summer — even though they know it’s going to cost them more than in recent years.
More than six of 10 Americans say it’s important they get away from home this year, a recent USA TODAY/Gallup Poll finds. And many say they’re finding ways around high gasoline prices, airfares and hotel rooms to do it.
“Rising gas prices won’t at all affect my vacation,” says Richard Miller of Plano, Texas, who’s flying to San Francisco in July with a ticket he scooped up in a fare sale. “I’m going.”
The poll indicates that Americans are prepared to pay more to get away this summer: 71% of those who tend to travel say they expect to spend more on transportation this year, and 44% plan on paying more for food, lodging and entertainment. Click here to read the entire article in USA TODAY.
Oil dropped again on Monday (May 16), and drivers are starting to see a little relief at the gas pump just ahead of the summer driving season, according to an AP report.
The average price for a gallon of regular was $3.955 nationally. That’s down about 3 cents from Friday, but still nearly 14 cents more than it was a month ago, according to AAA, Wright Express and the Oil Price Information Service.
Motorists in about two dozen states are paying more than the national average, and in 13 states the pump price is above $4 a gallon. Analysts expect prices to continue to fall across the country, perhaps as much as a quarter or more by Memorial Day.
Oil prices rocketed up 34% from mid-February through early May on fears that supplies could be disrupted because of uprisings in the Middle East and North Africa. Those fears have begun to abate as supplies continue to flow from the oil-rich region.
Traders also are more optimistic that Mississippi River flooding will not seriously interfere with operations at Gulf Coast refineries. The Army Corps of Engineers opened two massive gates at the Morganza spillway last weekend in an effort to protect Baton Rouge, La., and New Orleans from floodwaters.
Tom Kloza, publisher and chief oil analyst at OPIS, predicted pump prices will range between $3.25 a gallon and $3.75 a gallon by mid-June, with the biggest declines in regions that don’t rely on supplies from Gulf Coast refineries, such as the Midwest and the Rocky Mountains.
He said prices may have reached their high for the year already, if no big hurricanes hit refining centers, and upheavals in the Middle East do not crimp oil supplies.
Michael Lynch, president of Strategic Energy & Economic Research, estimated gas prices will fall to about $3.50 a gallon by summer.
Oil fell along with gasoline futures contracts on Monday, as concerns eased about flooding disrupting refineries and supplies. Jim Ritterbusch, president of energy consultancy Ritterbusch and Associates, noted that gasoline futures are lower with demand down because of high pump prices.
Benchmark oil for June delivery fell $1.80 to $97.85 a barrel in afternoon trading on the New York Stock Exchange. In London, Brent crude for June delivery lost $2.07 at $111.21 on the ICE Futures exchange.
Gasoline futures tumbled almost 8% Wednesday (May 11) after a government report added more evidence that Americans are driving less because of higher pump prices.
The Associated Press reported that The Energy Information Administration said U.S. gasoline demand dropped 2.4% last week, the largest drop in seven consecutive weeks of demand declines. Analysts said motorists have been forced to conserve gasoline with pump prices close to a national average of $4 per gallon.
“That $4 number is not just having a psychological impact, but a direct impact on drivers,” energy consultant Jim Ritterbusch said. “Normally, with the economy recovering, you’d expect gasoline demand to go up, but that’s not happening.”
Analysts said they’re now predicting a flat driving season this summer. At best, motorists will use about as much gasoline this year as they did in 2010.
“My opinion is that they started cutting back when prices hit $3.50” per gallon, oil analyst Andrew Lipow said. “We haven’t seen the full effect of that just yet.”
Decline in demand at the pump has helped offset a variety of operating problems that idled numerous refineries around the country over the past few months.
The EIA data showed that gasoline supplies increased by 1.3 million barrels last week despite a drop in refining activity around the country. Gasoline for June delivery plunged after the report, losing 26 cents at $3.1221 per gallon on the New York Mercantile Exchange.
Gas supplies typically decline in the spring as refineries purge their stocks of winter fuels. This year supplies fell more than expected as fires, power outages and other problems temporarily knocked refineries out of commission. Mississippi River flooding also may affect some refineries, analysts said.
Lipow said he thinks refineries probably won’t be damaged by the flood, although the rising Mississippi could damage docking stations and keep barges and oil tankers from moving upstream.
“There’s going to be a logistics and distribution problem for a while,” he said. “I’d say, probably, all the refineries in the Baton Rouge area will still have access to crude oil via pipeline.”
Gasoline pump prices increased on Wednesday by almost a penny to $3.962 per gallon. It’s the first rise in six days. A gallon of regular is 19.2 cents more expensive than a month ago and $1.061 higher than the same time last year.
Corporate fleet managers rate higher and more volatile fuel prices as their top concern in 2011, according to a recent survey conducted by GE Capital Fleet Services. More than a quarter of respondents (29%) said the recent spike in fuel prices has made this issue their top concern, up from 12% a year ago, Commercial Carrier Journal reported.
The survey of 105 fleet managers, conducted recently at the 2011 NAFA Institute & Expo in Charlotte, N.C., found that driver safety and cost savings were also top areas of concern. Concern for driver safety increased in 2011 to 28% from 21% in 2010, while cost savings fell as a priority but remained important at 23%, down from 36% in 2010.
Moreover, cost savings are now a bigger focus for executive management, according to fleet managers; 64% of those surveyed indicated that executive management’s main focus for fleets is cost savings, up from 48% in 2010.
“Volatile fuel prices are an overriding concern today for corporate fleet managers, given the current environment,” says Clarence Nunn, CEO of GE Capital Fleet Services. “We are seeing a corresponding increase in interest from our fleet customers for solutions in fuel, telematics and maintenance programs that will help them combat rising fuel costs and improve operational efficiency.”
Other key findings from the survey include:
- Analytics: 29% of fleet managers use fleet analytics to improve operational efficiency, and 27% noted that analytics helped them achieve cost savings’
- Lease accounting: Between a third and half of fleet managers (40%) feel they don’t have a good enough grasp of how pending changes to lease accounting rules (FASB) will affect fleet leasing; and
- Electric Vehicles: 28% said they plan to incorporate electric vehicles into their fleets within the next 12 months.
Investors finally hit the brakes on oil, gold, silver and food prices. This week’s sharp sell-off doesn’t mean commodity prices’ stunning rise over the last several months is over, but it is good news for anyone planning a road trip this summer.
Oil prices fell 15% this week, the steepest decline in 2 1/2 years, just as average U.S. pump prices were approaching $4 a gallon, the Associated Press reported. Gasoline prices fell imperceptibly to consumers’ eyes Friday — one-tenth of a penny to just over $3.98 per gallon — but that ended a 44-day streak of rising prices. Prices will soon drop noticeably, and some analysts said they could hit $3.50 by summer.
Analysts say investors got nervous that oil, metals and grains had risen over the past few months to unrealistic heights. Their rush to sell also knocked silver prices down 28%, sugar down 13% and natural gas down 10%.
The most common reason given by analysts for the sell-off was the strengthening U.S. dollar. Commodities such as oil and silver are bought and sold in dollars. When the dollar is weak, those commodities are cheaper for holders of foreign currency. Those investors sell when the dollar rises and commodities look more expensive to them.
An index of the dollar compared with a basket of foreign currencies rose 2% for the week. But many investors who sold commodities this week may simply have been waiting for a sign — any sign — to get out of overheated markets. “You had the sense that the price had gone up too far, too fast,” said Michael Lynch, president of Strategic Energy and Economic Research. “People were leaning against the door and waiting for a signal.”
Commodity prices began to rise in late August. That’s when the Federal Reserve signaled its intention to embark on what became a $600 billion government bond-buying program designed to push down interest rates, boost stock prices and jolt the economy.
But the dollar fell as a result. Investors knew that the Fed would be flooding financial markets with U.S. currency. Many dollars poured into commodities, pushing them ever higher.
Other factors such as concern about Middle East oil supplies and China’s demand for raw materials contributed to the momentum. Analysts warned that it was overdone. Still, traders say this week’s sell-off is very likely just a pause in a long-term upward trend for commodities.
“This move wasn’t about supply issues,” said Rich Ilczyszyn, senior market strategist at Lind-Waldcock, a Chicago futures brokerage firm. “It was people hedging and people investing.”
Investing in futures has exploded. Commodity index funds have an estimated $300 billion riding on futures, up from $13 billion seven years ago, according to Mike Masters, a hedge fund manager who has argued for regulations limiting speculation. This has raised concerns that consumers are paying higher prices than they should for energy and food.
President Barack Obama recently convened a task force to investigate manipulation of oil and gas markets.
The task force’s chairman, Attorney General Eric Holder, wrote a memo Friday to several government agencies addressing the commodity sell-off. “If wholesale prices continue to decrease, fraud or manipulation must not be allowed to prevent price decreases from being passed on to consumers,” he wrote.
Oil fell from a two-year high of $114.83 during Monday trading, to $97.18 at Friday’s close. Before Friday, the price of gasoline rose every day since March 23. Its 30% rise this year was primarily due to a 35% rise in oil from mid-February until last Friday. Refinery shutdowns also contributed. Gas prices also tend to rise every spring as refineries follow federal regulations to produce summer gasoline blends that evaporate less readily and are more expensive to make.
On Friday, the national average cost of gasoline was $3.984 per gallon, according to AAA. Gas prices are $1.06 more per gallon than they were a year ago. The average is higher than $4 in 13 states.
Market factors, rather than price-fixing practices, were determined to be the cause for a significant increase in gas prices at three gasoline stations in Indianapolis and one in nearby Terre Haute, Ind.
The attorney general’s office conducted an immediate review of consumer and media reports that prices rose to $4.17 per gallon in a short period of time. The review was conducted by Tom Bodin, the attorney general’s chief economist, Inside INdiana Business reported.
The stations were asked to provide information for the pricing review including the wholesale prices paid for the gasoline sold on April 25, prices paid during the prior week and any other factors that contributed to their posted retail price.
The stations that have responded to the inquiry include Circle K and Phillips 66 located at the Southport Road exit off of Interstate 65 in Indianapolis. After an analysis of all market factors including state and federal taxes, credit card fees and operating expenses, the attorney general’s analysis concluded the per gallon retail price was justified. A review remains pending on the Speedway station located on Southport Road and the Terre Haute station located near North 22nd Street and Wabash Avenue.
Last week, United States Attorney General Eric Holder announced the formation of a new consumer protection watchdog group that will monitor the oil and gas markets for potential violations of criminal or civil laws. In his role as the consumer protection committee co-chairman for the National Association of Attorneys General, Indiana Attorney General Greg Zoeller will be working with this group which includes representatives from the Department of Justice, the National Association of Attorneys General, the Commodity Futures Trading Commission, the Federal Trade Commission, the Department of the Treasury, the Federal Reserve Board, the Securities and Exchange Commission, as well as the Departments of Agriculture and Energy.
Since 2003, the Indiana Attorney General’s office has monitored prices of gasoline sold at the retail level and compares the pump prices to the local and state averages, trading prices on the futures market and other statistical data. Current research indicates that price movements within Indiana, though drastic, are in line with price fluctuations occurring across the country which are affected by a dynamic global market and complex economic factors.
The attorney general’s office operates a gas price hotline so Hoosier drivers can report pump prices that appear to be higher than average. These reports are tracked and any outlying prices are reviewed by the chief economist. The hotline number is (866) 241-9753.
Editor’s Note: The following story was provided by the Michigan Business Review, based in Grand Rapids.
Roughly 24 hours after we first posed the question, most respondents to our poll on gas prices vs. camping seem split into two, um, camps: those who think gas prices are already too high, and those who won’t let any price get between them and a s’more.
Unfortunately for that first group, gas prices were not declining yet this afternoon following the surprise spike on Monday (April 25). Website gasbuddy.com found gas prices in the Grand Rapids area still close to $4.17 this afternoon.
That’s the price where many area stations have been stuck since Monday morning, a price that caused us to ask, “When gas hits $4.17 a gallon, are you still going camping?” Publishers of the Michigan Campground Directory shared the question on their Facebook page, and we had 430 responses by mid-day Tuesday — a good time to tally the results.
First, we asked about gas prices, and what price range would convince you to change your plans this summer.
The largest group of responses, 166, said they would be forced to change their plans if the going price was $3.90-$3.99 a gallon — a price the Grand Rapids area hasn’t seen since last Tuesday, according to gasbuddy.com.
However, the next-largest group, at 132, said the price of gas was no object.
The remainder: 79 said their tipping point was between $4.00 and $4.09, while 53 put that figure at between $4.10 and $4.20.
Several of the respondents commented that their preferred camping site this year would be the backyard, due to gasoline and other travel costs.
But not everyone. We also asked readers to list their favorite state park campground in the western half of the Lower Peninsula.
Ludington State Park was the single most popular pick, with 89 responses, or 21%. Perhaps that’s no surprise for a park known as “Queen of the State Parks,” with a reputation for filling up with reservations early.
Next was Charles Mears State Park with 51, and P.J. Hoffmaster State Park with 43. Other popular choices were Grand Haven, Silver Lake, Traverse City and Yankee Springs.
But “other” remained the largest group, including entries such as Warren Dunes, Wilderness State Park, and Isle Royale National Park (“no cars, few people, no cell phones. Also the night sky is amazing.”)
But this also was the place where several respondents registered their frustration with gas prices, selecting “my backyard,” or even “my backyard pool.” For these folks, the best hope for summer travel might be a return to last year, when Michigan prices were well below $3 a gallon for the Memorial Day kickoff of summer travel.