State Fuel Price Continues Modest Decline

Phoenix, Ariz., February 11, 2010. Arizona motorists are spending less to fill their tanks for the second week in a row, as the state average for fuel stands at $2.633 for a gallon of regular unleaded gasoline, a decline of two cents from this time last week.  Today’s nationwide average is $2.636 per gallon, a drop of 2.3 cents from last week.

Last week, oil prices were under tremendous downward pressure that pushed prices to their lowest levels in nearly two months, as the realization set in among some markets that oil’s recent price jump was an example of market exuberance that never really had legs to stand on.

That falling trend reversed this week, among conflicting reports from the Energy Information Administration (EIA) and the Organization of Petroleum Exporting Countries (OPEC).  The EIA raised its forecast for 2010 global oil demand growth; however, OPEC countered that prediction by trimming their forecast, due to uncertainty about the pace of economic recovery. There are also two international news items said to be lending support to higher prices in the short-term, including continued unrest in Nigeria, and an announcement by the U.S. on targeted sanctions against Iran, both oil-producing and exporting countries.   

On the retail side, gasoline demand was soft for the week, due in large part to the massive snow storm that hit the Mid-Atlantic region over the weekend and severe weather in other parts of the country as well. 

“Although gas demand is soft for much of the country, the massive snow storm that has crippled much of the northeast this week has also contributed to an increased demand for heating fuel, which has subsequently had a role in the recent uptick in oil prices,” said AAA Arizona Public Affairs Director Linda Gorman. “As this part of the country returns to normal, the market should calm down and retail prices should have room to fall even a bit lower, at least in the short term.”

In Arizona, Tucson drivers are paying the state’s lowest fuel price with an average of $2.500, while Flagstaff motorists are paying the state’s highest fuel price with an average of $2.785 per gallon. Nationwide, motorists in Missouri are paying the nation’s lowest fuel price with an average of $2.403 per gallon, while California motorists continue to pay the most for fuel in the lower 48 states with an average of $2.955 per gallon.

Motorists can visit www.AAAaz.com/news/fuelnews.htm for fuel price information and gas saving tips or go to www.AAA.com/fuelfinder to locate the station with the cheapest gas in their neighborhood. They can also visit www.fuelcostcalculator.com, which can help drivers plan out their fuel costs so they can budget their travel expenses in advance.

*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 should include attribution to AAA.