The millions of U.S. motorists planning to hit the roads this July 4 holiday may have a new reason to light up fireworks: Gasoline pump prices have fallen 10 percent ahead of the peak summer vacation season.
“DRIVERS WILL BE PLEASED that they’re getting relief from the high prices that they suffered through (this spring),” said Geoff Sundstrom, spokesman for the American Automobile Association, on Wednesday.
The national average price of gasoline fell 17 cents from record highs last month to $1.55 a gallon, or 11 cents below last year, according to the AAA survey of 60,000 service stations.
The decline, attributed to growing supply due to heavy refining activity and sluggish demand, comes only days ahead of Independence Day road travel, which the AAA anticipates will be busier than last year despite a slowing economy.
Roughly 36.6 million Americans are planning to take a trip more than 50 miles from home July 4 — up slightly from last year’s 36.3 million — with 31.8 million of them planning trips by car, according to the AAA.
“While gasoline prices are still fairly high, they’re coming off sharply and motorists are not deterred from taking their trips,” said Sundstrom.
Industry figures show that year-on-year gasoline consumption is stagnant so far this year, possibly due to stormy weather and higher prices in the spring.
Pump prices could have farther to fall, however, tracking a 40 percent nosedive in wholesale prices. Gasoline futures on the New York Mercantile Exchange, which reflect wholesale values, were hovering just above 71 cents a gallon Wednesday, down from the late-April high of $1.17 a gallon.
Weaker wholesale prices generally take at least two weeks to get passed on to the pumps, but in some cases price competition can accelerate discounts at service stations.
“I changed my gas price 10 times on Monday,” Mohammad Mukhtar, owner of a Stop-N-Go in Buna, Texas, told the Houston Chronicle. Mukhtar’s prices fell from $1.47 last week to 98 cents a gallon, dragging the competing Citgo station’s prices down with him.
The weaker gasoline prices top off a broader decline in energy prices that has also pushed natural gas down sharply — a good sign for electricity costs since generators use the fuel to produce power.
Crude oil prices, while softer on the heels of gasoline, remain buoyed near $26 a barrel by worries over OPEC supply and Iraq’s export disruptions — threatening to cut into refiner profits and lead firms to produce less gasoline.
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