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Gas prices dip below 2011 level

AAA Carolinas
For the first time in 2012, the average price for a gallon of gasoline in North Carolina was cheaper by 2.8 cents today than last year, according to AAA Carolinas.
The average price today is $3.788 per gallon compared to $3.816 a year ago. The highest 2012 average price paid in North Carolina for regular unleaded gasoline was $3.913 on April 7 with prices declining daily since then.
Last year the spring price average peaked on May 6 at $3.877 per gallon and then dropped 19.3 cents by the end of the month (May 30).
“Hopefully, we will see a repeat of last year,” said David E. Parsons, CEO and president of AAA Carolinas. “Prices fluctuated between $3.50 to $3.70 in the summer, but then declined to end last year at $3.252.”
Factors placing downward pressure on prices include:
• European sovereign debt that weakens the strength of the Euro against the dollar, making speculative investment in oil futures, which drives up crude oil prices, less financially attractive. Those who trade in Euros sell/buy crude oil in dollars, so a strong dollar discourages investment.
• Weakening overseas economies, especially China, means less consumption of crude oil, thus weakening demand.
• Americans are driving less — roughly 5 to 6 percent — than last year.
• Gulf of Mexico refineries that typically curtail supply in the spring to convert from heating oil to gasoline, perform needed maintenance and prepare to produce cleaner summer blends for Northeastern states to reduce air pollution, are now operating at near capacity.
• Iran has stopped its threats to interfere with oil shipments through the Strait of Hormuz in retaliation for economic sanctions against Iran for its nuclear development program.
“The price of oil is no longer a simple supply and demand domestic situation,” said Parsons. “Oil is a global commodity affected by international events that reverberate at the pump.”
AAA Carolinas expects prices to continue their downward trend with some price stabilization through the heavy motoring months of summer – if global conditions remain unchanged and hurricanes don’t affect the Gulf of Mexico.
While statewide the average price was down, according to surveys of credit cards used at pumps across the Tar Heel state yesterday, the average price in Asheville remains higher at $3.87 per gallon than last year’s $3.854 a gallon.
Prices were lower in Fayetteville (1.9 cents), Wilmington (1.1 cents), Greensboro-Winston-Salem-High Point (3.3 cents), Raleigh-Durham-Chapel Hill (3 cents) and Charlotte-Gastonia (4.9 cents).
South Carolina’s average price today is $3.598. A year ago it was $3.693. South Carolina has the fourth lowest average gas price in the nation, behind Missouri, Oklahoma and Kansas.
AAA Carolinas, an affiliate of the American Automobile Association, is a not-for-profit organization that serves more than 1.8 million members with travel, automobile and insurance services while being an advocate for the safety and security of all travelers.
Connect with AAA Carolinas on Facebook at facebook.com/aaacarolinas and follow on Twitter at @AAACarolinas.

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