With fuel prices down, motorists have reason to celebrate over the long Independence Day weekend.
Don’t be surprised if the local market marks up prices on hot dogs, ground beef and barbecue supplies in the coming days as they take advantage of the Independence Day holiday – but getting to the store might prove cheaper than anticipated.
Despite recent forecasts that gasoline prices might skyrocket to $5 a gallon by the Fourth of July, those predictions have proved to be duds. A variety of factors – including the White House decision to tap the national strategic oil reserves – are getting credit for the unexpected plunge in prices, which peaked at around $4 a gallon in late spring.
Many service stations owners are still expected to nudge their numbers up, however, taking advantage of travelers who might be less likely than normal to look for the best bargains. On the other hand, retail giant Wal-Mart announced that it will cut the price of fuel sold at many of its stores across the country by a dime, a discount it says it will maintain for the next 90 days.
That deal might put pressure on other retailers to curb their own prices, industry analysts suggest, especially big box competitors like Costco.
According to the AAA Fuel Gauge Report, national gasoline prices were averaging just $3.543 a gallon for unleaded self-serve regular, down eight cents in the last week and off a quarter from a month ago. In many parts of the country, fuel is now a half-dollar or more below the spring peak.
That has many Americans feeling the wanderlust they might have suppressed when it seemed like there’d be record prices to pay over the holiday.
A survey by Hankook Tires found 30% of motorists indicating they now plan to head out for the holiday.
Nationwide, the AAA is predicting a modest decline in road travel over the coming long weekend, 38 million Americans expecting to drive at least 50 miles, compared to 1 million who headed out for Independence Day 2010.
But there are signs that travel plans are closely linked to what motorists are seeing at the pump. And in regions where fuel prices are low – and falling – driving is a popular holiday option.
“Any drop in gas prices is good news for motorists, the economy and holiday travelers,” said Dave Parsons, CEO of AAA Carolinas. “Today’s travelers tend to be much more spontaneous, booking trips last minute. The recent pump price relief will likely spark many undecided Carolinians to take a holiday getaway.”
The regional arm of the AAA expects to see a 3% year-over-year increase in the number of motorists from the Carolinas traveling at least 50 miles over the long July Fourth weekend.
The highest fuel prices in the country are currently being reported in Hawaii, where regular is going for $4.15 a gallon, according to a survey by GasBuddy.com. In the Continental 48, Washington, D.C. motorists are shelling out $3.90, while Californians are paying $3.769.
At the other end of the spectrum, South Carolina’s pumps are average $3.26 for regular, with Mississippi close behind at $3.343.
But prices are still showing unpleasant volatility, as motorists in the Dayton, Ohio region discovered when prices spiked 20 cent upward mid-week, apparently in preparation for the holiday.
And despite the declines seen in some regions, national gas prices are still about a dollar above where they were a year ago, according to AAA data.