Price Break at the Pump May be Short Lived

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TAMPA, Fla. (July 1, 2012) — Motorists will get a break at the pump during one of the biggest holiday weekends of the summer, but it may not last long after decisions in Europe gave oil prices a boost. Although conversations about Iran have not been at the forefront of the news, oil prices increased before the July 1 implementation of Europe’s sanctions against Iran that ban everything from the purchase to insurance of Iranian oil.

Also giving oil prices a boost was the announcement of Europe’s plan to resolve its two-year financial crisis. Speculation that agreements made between European countries to save the euro has spurred optimism that fuel demand and economic growth will increase in the region. However, it’s normal to see the market react in a bullish manner with the beginning of imposed sanctions on Iran and a proposed resolution to Europe’s debt issues. Oil prices increased last week to settle Friday at $84.96 a barrel on the New York Mercantile Exchange–$5.20 more than the week prior.

“For many, a feeling of relief comes when $2 replaces $3 on the marquee for a gallon of gas,” said Jessica Brady, AAA spokeswoman, The Auto Club Group. “For the first time this year, motorists will pay less than $3 a gallon for retail gasoline and the timing couldn’t be better as the Independence Day holiday approaches. While drivers will enjoy the reduced prices this week, they may start to see prices stall and even a slight uptick at the pump, depending on how the situation with Iran unfolds and how long Europe’s financial plan maintains the market’s optimism.”

The national average price of regular unleaded gasoline is $3.33, 9 cents less than last week. Florida’s average of $3.19 decreased 7 cents from last week, while Georgia’s average of $3.13 fell 8 cents from a week ago today. And, Tennessee’s average price of $3.01 dropped 9 cents from last week, respectively. Visit AAA’s Daily Fuel Gauge Report to find national, state, and local metro market retail gasoline prices.

CURRENT AND PAST PRICE AVERAGES

Regular Unleaded Gasoline

Current                      Week Ago          Month Ago           Year Ago

National:                                 $3.330                         $3.420             $3.611                 $3.550

Florida:                                    $3.189                         $3.264             $3.452                 $3.502

Georgia:                                   $3.131                         $3.212             $3.386                 $3.455

Tennessee:                              $3.010                        $3.101             $3.305                 $3.365

Gas Pump

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