Last week, the AAA published a report for fuel prices during the month of July, as well as an outlook for this month. It’s data shows July petrol prices had the biggest increase for over 12 years, and it predicts these prices to stay relatively flat until September.
For the month of July, the AAA has found that there was a 5.1% (17 cent) rise in national average petrol prices per gallon. This was the first increase for a month since March, and the largest for a July since at least 2000, when the agency began to keep records. This brought the national average to $3.42 – the third highest average ever recorded for the month of July.
The national average rose on 26 days during the month after hitting a low for the summer at $3.33 on July 2. This increase was even faster than July last year, when fuel prices rose 4.4% (15.7 cents per gallon). Over the last decade, average petrol prices have risen in five of those years. For the year so far, the average price of fuel has been $3.61. This is slightly higher than last year’s $3.54 average between January and July. For the same period over the last five years, average prices have been $3.04.
As of July 31, the national average price of regular fuel was $3.50 per gallon at the pump. This was a 1.4 cent difference from the day before. It’s also 2.3 cents higher than the previous week, down 20.7 cents from last year, and 43.6 cents cheaper than the peak of prices on April 5 and 6 earlier this year. The top five states for the highest fuel prices per gallon include: Hawaii, at $4.148; Alaska, at $3.995; Connecticut, at $3.818; California, at $3.802; and New York, at $3.767. The lowest prices per gallon can be found in: South Carolina, at $3.202; Mississippi, at $3.241; Alabama, at $3.254; Arizona, at $3.270; and Arkansas, at $3.276.
The main reasons for the rise in fuel prices over July were increasing ethanol and crude prices. Mixed economic news about the worldwide economy and geopolitical events in the Middle East didn’t help any either. Despite the rise in petrol prices for the month of July, the AAA has predicted that costs will stay flat or slightly increase for the month of August. This estimate comes even though prices have historically declined in August – doing so in seven of the years out of the past decade. It would be the first time petrol prices have increased during an August since 2009.
Developments in the market that could change the August prediction include: geopolitical matters in the Middle East; US unemployment data; news suggesting a worsening or strengthening worldwide economy; the hurricane season in the Atlantic; and European sovereign debt-developments. However, the AAA expects fuel prices to start declining soon after Labor Day – the end of the summer driving season. Refineries will then transition to less expensive blends of fuel and there will be less demand for petrol.
AAA spokesperson Avery Ash says that motorists across the country saw the decline in petrol prices over the previous three months make a u-turn during the month of July. Increased demand for fuel for the summer driving season and higher global oil prices were the main factors that sent costs up. Motorists will continue facing high prices at the pump in coming weeks as the summer comes to an end. However, he added, relief could come in the autumn, as they anticipate petrol prices to fall.
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