AAA Executive Vice President Mark Brown Testifies Before the U.S. House Committee on Natural Resources
March 27th, 2012 by admin
Executive from one of the nation’s largest leisure travel organizations discusses the potential impact of rising gas prices on American travelers
WASHINGTON, DC, (March 27, 2012) – AAA Executive Vice President, Association and Club Services, Mark Brown testified before the U.S. House Committee on Natural Resources today regarding the impact of gas prices on the U.S. travel industry. Brown provided Committee members with a consumer prospective on the impact of fuel prices on household budgets and travel plans.
“Once again America’s motorists are caught in a squeeze and confused as they try to understand what is happening at the gas pump,” said Brown.
Since the beginning of 2012, the national average price of self-serve regular unleaded gasoline has jumped from $3.28 per gallon to $3.90 per gallon, an increase of 62 cents per gallon. At this price, a typical family owning two vehicles and using 1,200 gallons of gasoline per year spends about $4,680 annually, or about $390 per month.
Brown cited the findings of a recent AAA survey in which 84 percent of respondents said they have already changed their driving habits or lifestyle in some way because of increased gas prices. Combining trips and errands was the most commonly reported cost-cutting tactic, with 60 percent of respondents reporting having already made this adjustment. Forty-five percent of respondents are dining out less and 34 percent are delaying major purchases.
With more than 1000 branch offices across the country and over 7,000 travel counselors, AAA has a finger on the pulse of the American traveler. Although rising gas prices can cause concern for the travel industry, Brown indicated that current feedback from AAA travel counselors is encouraging. “A quick poll of some of our agents suggests that members are not cancelling their vacation driving plans, but may alter the distance and number of destinations.”
AAA agents have noticed that consumers interested in purchasing individual airline tickets only are watching fares closely and waiting to book flights anticipating that fares may come down.
As the summer travel season approaches, Brown pointed out that it is still too early to determine the impact of higher gas prices on summer travelers. AAA produces five holiday travel forecasts each year with research partner IHS Global Insight. The first forecast for 2012, AAA’s Memorial Day Holiday Travel forecast, will be released in mid-May and will provide a reading of Americans’ desire to travel despite higher gas prices.
As North America’s largest motoring and leisure travel organization, AAA provides more than 53 million members with travel, insurance, financial and automotive-related services. Since its founding in 1902, the not-for-profit, fully tax-paying AAA has been a leader and advocate for the safety and security of all travelers. AAA clubs can be visited on the Internet at AAA.com.
AAA is a non-partisan organization providing unbiased reporting of gas prices through its popular weekly Fuel Gauge Report.
AAA Executive Vice President Mark Brown to Testify Before the U.S. House Committee on Natural Resources on March 27
March 22nd, 2012 by admin
ORLANDO, Fla., (March 23, 2012) – AAA Executive Vice President, Association and Club Services, Mark Brown will testify on March 27 before the U.S. House Committee on Natural Resources regarding the impact of rising gas prices on consumer travel plans. A copy of Mark Brown’s full written testimony will be posted on AAA NewsRoom at www.NewsRoom.AAA.com on March 27.
February 22nd, 2012 by admin
(WASHINGTON, Feb. 21, 2012) The price of West Texas Intermediate (WTI) crude oil increased by $2.60 per barrel today to settle at $105.84 at the close of formal trading on the NYMEX, after markets were closed yesterday for the Presidents’ Day holiday. This is the highest settlement price since May 4, 2011. Crude prices today were driven higher by bullish news overseas, as European finance ministers yesterday agreed to a Greek bailout package and Iran halted its oil exports to France and Britain.
An improving economy overseas would be expected to consume more oil, which exerts upward pressure on prices. At the same time, when economies strengthen overseas, the U.S. dollar weakens and the price of oil (traded in dollars) becomes relatively less expensive. Oil futures subsequently become a more attractive investment, which exerts upward pressure on prices, as was the case today. While Iran’s announcement that it would cut off oil exports to Britain and France is worth noting, as it continues the recent escalation of geopolitical tension and uncertainty in the market, the ultimate impact on supply is limited. Britain and France get the majority of their oil from the North Sea region, and Iranian imports account for only 3 percent of their daily needs.
Despite continuing reports of historically anemic demand, crude prices last week were pressured higher by positive economic reports and increased tension with Iran. As Greece moved closer to securing the bailout necessary to prevent default on its sovereign debt, the U.S. economy continued to show signs of recovery, and WTI crude prices rose to end the week at a new 2012 high. At the same time, WTI continued to trade at a significant discount to Brent crude (the historic European benchmark) due to the bottleneck of WTI at its delivery location in Cushing, OK. With this in mind, many analysts have suggested that Brent may be a more accurate global benchmark for oil prices at this time. While refineries in the center of the country have access to these relatively cheaper crude products, refineries near the coast must purchase crude at more expensive global prices. This disparity is subsequently reflected in the price that motorists are paying at the pump, as those in the center of the country see relatively lower prices than those closer to the coast. Please see below for a state-by-state list of today’s average price for a gallon of regular gasoline.
Motorists in Hawaii and California are paying on average more than $4.00 per gallon, while those in Colorado and Wyoming pay less than $3.10. Drivers in Hilo, HI pay the highest price of any metropolitan area nationwide ($4.44 per gallon) however the ten highest priced areas in the lower 48 states are all in California and are all above $4.00 per gallon as well. These areas with the top-ten highest prices are listed below.
- Santa Barbara-Santa Maria-Lompac, CA: $4.105
- San Luis Obispo-Atascadero-Paso Robles, CA: $4.103
- San Diego, CA: $4.087
- LA-Long Beach, CA: $4.082
- San Francisco, CA: $4.079
- Ventura, CA: $4.077
- Orange County, CA: $4.071
- Riverside-San Bernardino, CA: $4.047
- (tie) Oakland, CA: $4.031 and San Jose, CA: $4.031
The current national retail average price for a gallon of self-serve regular gasoline is $3.57. Today’s price is six cents more expensive than one week ago, 18 cents more expensive than one month ago, and 40 cents more expensive than one year ago.