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U.S. Motorists Unfazed by Rising Fuel Costs

February 6, 2013 by · Comments Off on U.S. Motorists Unfazed by Rising Fuel Costs 

Are motorists becoming like the proverbial frog in a pot of boiling water, unaware of the impending threat until it’s too late? Or are today’s prices just part of the new-normal? Hmm. Stay tuned.

Gas prices have been on the rise for weeks, and they’re set to spike in the months ahead. Does this sound at all familiar?

Thus far in 2013, Time.com reports, drivers have been paying less for gas, on average, than they were a year ago. During the first week of January, for instance, the national average was $3.30 per gallon, or 7 cents less than it was 12 months beforehand. But prices are rising, and the difference between current prices and 2012 counterparts is shrinking. Lately, according to AAA’s Fuel Gauge Report, the average gallon costs $3.42 nationally, compared to $3.45 a year ago.

USA Today reports that prices have risen by 20 cents or more in recent weeks in several Midwest states, and that prices in California are expected to spike soon to over $4 per gallon, up from around $3.75 currently.

So is it time to panic? Nah. More likely, the reaction of drivers is more along the lines of, “Oh well, here we go again. What’re you gonna do?”

And also: “Hey, prices are still cheaper than they were a little while ago.”

The average price per gallon was $4.67 in California as recently as October, and many stations in the state were charging more than $5. After facing the most expensive year ever for gas in 2012, drivers have heard that prices are supposed to be cheaper in 2013.

Oil Price Information Services’ Robert Gough told the Des Moines Register, “Gasoline prices averaged $3.60 per gallon last year, and we think they’ll average between $3.25 and $3.50 per gallon this year.” The U.S. Department of Energy, meanwhile, has predicted an average of $3.44 per gallon this year, and $3.34 for 2014.

In the grand scheme, a short-term seasonal surge in gas prices probably isn’t enough to make drivers bat an eye. We’ve been hearing about the likelihood of dramatically higher gas prices for decades, and we’ve been living through periodic price spikes at least since the summer of 2008—which was followed by sharp hikes in springtimes of 2011 and 2012. New-car MPG ratings have risen accordingly, as drivers increasingly opt for more fuel-efficient vehicles and federal guidelines force automakers to steer away from the gas-guzzling vehicles of the past.

 

Gas Goes Up, Gas Goes Down — RVers Adapt

June 4, 2012 by · Comments Off on Gas Goes Up, Gas Goes Down — RVers Adapt 

RVers adapt to fuel price changes

Average U.S. gas prices rose above $3.90 this spring, though they had dropped in most places by the start of June to $3.61 a gallon.

But whether they’re up or down doesn’t make a huge difference for those driving RVs, like Bill Battle’s Winnebago Itasca Suncruiser that averages about 7 mpg, the Atlanta Journal Constitution reported.

Battle and his wife plan to drive their 38-foot motorhome (towing their Jeep) about 1,400 miles round-trip from their home in southeastern Michigan to Forest City, Iowa, for the Winnebago Grand National Rally this summer. It will likely cost them between $700 and $800 in gas, depending on pump prices, plus another $750 for food, campground fees and other expenses. The rest of the year they expect to stay closer to home, driving less than 600 miles per trip.

Even if gas were to go as high as $5 or $6 — though that seems unlikely given the direction prices are headed at this point in the season — Battle, a 68-year-old retiree, said they wouldn’t stay home. “We’ll still go, but we’ll do shorter trips,” he said. On the other hand, a steep drop might inspire more travel: “If fuel prices were $2.50 a gallon we probably would have made a second big trip to the Western U.S.”

A recent survey shows others have arrived at the same conclusion. Of nearly 425 RV owners interviewed in March by the Recreation Vehicle Industry Association (RVIA), 60 percent said fuel prices were affecting their plans, and that they would adjust by driving less and traveling to destinations closer to home.

Kampgrounds of America Inc. (KOA), which represents about 500 campgrounds, has been marketing to the “camping closer to home” crowd, and reservations for this summer are up about 4 percent over 2011, said spokesman Mike Gast, in Billings, Mont.

There are about 9 million RV owners in the United States, and sales of new RVs are expected to increase 5 percent this year, said RVIA spokesman Kevin Broom, in Reston, Va.

About 90 percent of the units sold are towable trailers, as opposed to motorhomes. Broom said that has less to do with high gas prices, and more to do with the purchase price.

The average price of a big Class A motorhome, which looks like a bus, is about $176,000, while a small travel trailer averages $20,900 and a folding tent trailer $9,400, Broom said.

In fact, manufactures have been conscious of rising gas prices for the past few years, making campers smaller, more aerodynamic and fuel-efficient. A new 32-foot Class A motorhome, for instance, might get up to 15 mpg, Broom said.

The industry commissioned a study on the cost of RV travel last summer, and PKF Consulting found that the average weeklong two-person vacation using a Type A motorhome, staying in campgrounds and cooking all meals, would cost about $4,285, when factoring in the RV purchase price, maintenance and gas.

The cost for two people flying economy to their destination, renting an intermediate car, staying at a standard motel or a hotel like Days Inn, and eating in restaurants for the week would cost $2,735. Only with first-class plane tickets, premium SUV rentals, dining out and the most expensive hotels — like the Ritz Carton or Four Seasons — did it become more costly than Class A motorhome camping, averaging $5,360 per week, the study found.

On the other hand, pulling a travel-trailer with a light truck and staying and eating at campgrounds would cost about $1,845 for the week, it found. Savings or not, Battle likes his 5-year-old Winnebago Class A motorhome and has no interest in flying. He reels off a list of reasons why camping is better: no airports to deal with, no security lines, room for more luggage and golf clubs, a fridge and freezer he can stock, no bedbug worries and the company of Buddy, his chocolate lab.

“One day we can be in a quaint village touring wineries and the next we can be in a RV park on the shore of one of the Great Lakes,” Battle explained.

In order to watch the pennies, Battle said he uses an interactive AAA site to map his route and check the prices at gas stations along the way. He and his wife will often barbecue instead of eating out, and they’ve been known to overnight in a casino parking lot.

“You know what you have to spend and you make your plans ahead of time,” he said. “We love the convenience of the motorhome.”

 

 

RVIA Offers Data to Address Fuel Price Questions

February 13, 2012 by · Comments Off on RVIA Offers Data to Address Fuel Price Questions 

With gas prices once again on the rise, the Recreation Vehicle Industry Association (RVIA) has collected positive data and RV travel savings information to use in responding to media questions that may be asked of industry spokespeople in the coming months.

With the approach of the spring and summer travel seasons, these facts are also suitable for use in consumer marketing communications.

RVIA updates this information on a regular basis. Please visit www.rvia.org for the latest version.

Among the points:

  • RV travel is a great value. The PKF Vacation Cost comparison study shows that a family of four can save 23 percent to 59 percent on vacation costs depending on the type of trip and type of RV used. A two-person travel party (the typical empty-nest couple) would save 11 percent to 46 percent.
  • More than 80 percent of RVers say their RV vacations cost less than other forms of vacation, even when fuel prices rise.
  • Many RV owning families take frequent mini-vacations in their RVs. Sixty-three percent spent five or more weekends in their RVs last spring/summer.
  • When fuel prices rise, RVers adjust by traveling to destinations closer to home, driving fewer miles, and staying longer in one place, according to surveys of RV owners conducted by RVIA and CVENT, a leading provider of online surveys and research technology.
  • To save on fuel, RVers typically spend more time enjoying the campground experience and less time on the road. More than 16,000 campgrounds nationwide give RVers the flexibility to save fuel and cut costs by staying closer to home. Whether they travel five miles or 500, they can still enjoy a great outdoor experience.

    Pump prices rising

  • Fuel prices would need to more than double from their current level to make RVing more expensive for a family of four than other forms of travel, according to PKF Consulting. PKF’s spring 2011 vacation cost comparison study shows that RV trips remain the most affordable way for a family to travel because of the significant savings on air, hotel and restaurant costs, which continue to rise.
  • Fluctuating fuel prices affect the cost of all modes of travel and transportation. Airfares and hotel rates rise rapidly when fuel costs increase.
  • Many RV owners surveyed take additional measures to reduce fuel consumption through simple steps like driving 55 mph instead of 65 mph, packing lighter to reduce weight in the RV, and turning off home utilities to save energy when traveling. RVers travel at a leisurely pace with no tight schedules for flights, hotels or restaurants.

For more information, contact RVIA’s Kevin Broom at (703) 620-6003, ext. 304, or kbroom@rvia.org.

Economic Uncertainty Fuels Gas Price Decline

October 3, 2011 by · Comments Off on Economic Uncertainty Fuels Gas Price Decline 

Relief at the gas pump. But at what cost?

Soaring gasoline prices are in the rearview mirror, according to an Associated Press report.

For the first time in months, retail gasoline prices have fallen below $3 a gallon in places, including parts of Michigan, Missouri and Texas. And the relief is likely to spread thanks to a sharp decline in crude-oil prices.

The national average for regular unleaded gasoline is $3.51 per gallon, down from a high of $3.98 in early May. Last week’s plunge in oil prices could push the average to $3.25 per gallon by November, analysts say.

Economist Philip Verleger equates it to “a stimulus program for consumers,” leaving them more money for clothes, dinners out and movies. Over a year, a 50 cents-per-gallon drop in gasoline prices would add roughly $70 billion to the U.S. economy.

Prices for oil, gasoline and other commodities dove last week along with world stock markets over concerns the global economy is headed for another recession. When economies slow, demand for gasoline, diesel and jet fuel falls as drivers cut back on trips, shippers move fewer goods and vacationers stay closer to home. Oil fell to $79.85 per barrel Friday, a drop of 9% for the week. Oil reached a three-year high of $113.93 on April 29.

Economists caution that gasoline savings, while welcome, won’t matter much to people if the worst economic fears come to pass.

“Yes it produces some relief, your bill at the gas pump goes down, but it’s going down because there are worries that people won’t have jobs,” says James Hamilton, an economics professor at the University of California, San Diego. “The news has not been good.”

And gasoline prices remain historically high. Gasoline has averaged $3.56 this year, the highest yearly average ever. Americans have cut back driving in the face of high prices, but they are likely to spend more on gasoline in 2011 than ever before — close to $490 billion, according to Tom Kloza, chief oil analyst at the Oil Price Information Service.

Kloza says the latest drop in prices will stick around through most of the fall. And while that may only add $20 a month to a typical commuter’s wallet, drivers say it matters.

RV Dealers to Hear Oil Industry Exec at Oct. 6 Expo

June 30, 2011 by · Comments Off on RV Dealers to Hear Oil Industry Exec at Oct. 6 Expo 

John Felmy

Chief economist John Felmy of the American Petroleum Institute (API) will explore the various factors that affect fuel prices and help dealers navigate the issue of volatility in the oil market during a special panel discussion on Oct. 6 at the 2011 RV Dealers International Convention/Expo at the Rio All-Suite Hotel & Casino in Las Vegas.

The convention is sponsored by RVDA–The National RV Dealers Association, RVDA of Canada and the RV Learning Center, according to a news release.

Tom Walworth of Statistical Surveys Inc. (SSI), the RV industry’s retail sales scorekeeper, will moderate the panel, titled “Future Fuel Prices – What You Need to Know.”  Dealers will get valuable perspectives on how to address the fuel price issue with their employees and customers as well as learn the real impact of oil prices on consumers’ household budgets.

As chief economist, Felmy is responsible for overseeing economic, statistical, and policy analysis for API. Felmy is a member of the American Economics Association and the International Association for Energy Economics. API is the national trade association that represents America’s oil and natural gas industry. Its members are producers, refiners, suppliers, pipeline operators and marine transporters, as well as service and supply companies that support the industry.

RV dealers John McCluskey of Florida Outdoors RV Center in Stuart, Fla., and Bill Redmond of Bucars RV Centre in Calgary, Alberta, will join the panel to provide the RV retailer’s perspective.

“Top management at dealerships needs to be able to understand the impact of the oil markets on the RV industry and communicate the real story as fuel prices go up and down,” says RVDA Convention/Expo Committee Chairman Peter Albano of American RV in Olive Branch, Miss. “This session will give us the tools to separate fact from fiction when it comes to the fuel price issue.”

Themed “ReVolution: Take Charge Today,” the convention will feature new, in-depth super sessions covering the top issues RV dealers and their employees are facing. The education program will include information on building sales through innovative marketing strategies that reach new customers and an overview of the short and long-term trends that will affect the RV industry.

Report: Gas Prices May Have Hit Peak

May 26, 2011 by · Comments Off on Report: Gas Prices May Have Hit Peak 

Prices come tumbling down.

Summer driving season usually means gasoline prices are set to climb, but this year Memorial Day could mark the start of a significant drop in prices at the pump.

CNBC reported that gasoline hit $3.98 a gallon for the national average in mid-May and by Wednesday (May 25), it had dropped to $3.81, according to AAA.

“I think there are several trends pointing to $3.50 as the national price between now and July 4th,” Gulf Oil CEO Joe Petrowski said Wednesday on CNBC. Less demand is one factor. “Even at current prices, demand is down 4% to 5%, and we’re generally among the most competitive at the pump.” Gulf Oil has more than 2,500 branded retail gasoline stations in the U.S.

According to the U.S. Energy Information Administration (EIA), total motor demand has been relatively flat over the past month. Yet a MasterCard survey of retail gasoline demand found the four-week average has declined for nine consecutive weeks compared to the same period a year ago

Rising supplies are another factor helping to drive down prices. Gasoline inventories rose sharply last week, up nearly 3.8 million barrels, according to the EIA. Gasoline inventories have jumped by more than 5 million barrels in the past three weeks, ahead of the start of the summer driving season, a time when, historically, inventories are on the decline.

Storm-related power outages at several refineries and fears that rising Mississippi River flood waters would further impede gasoline production led to a price spike earlier this month. But oil and gasoline prices have come back down as those fears have abated and supplies have risen.

“It’s unusual to see retail gasoline prices dropping during Memorial Day weekend,” said OPIS energy analyst Tom Kloza. He expects prices to continue to fall over the next week. “Most of the $4 gas is going to disappear.”

The national average for regular gasoline is already at a five-week low ahead of the holiday weekend. Yet pump prices are still about a dollar higher than a year ago. In several states, including California and New York, gas prices average more than $4 a gallon.

But some consumers’ responses to high prices may continue to be to drive less and cut back on fill-ups. That may help gasoline prices come down even further.

RVIA Offers Facts to Address Fuel Price Questions

May 12, 2011 by · Comments Off on RVIA Offers Facts to Address Fuel Price Questions 

RVIA counters gas price myths

With gas prices continuing to climb through the Spring, the Recreation Vehicle Industry Association (RVIA) has collected positive data and RV travel savings information for industry members to use in responding to media questions that may be asked in the coming months.

With the onset of the summer RV travel season, these facts are also suitable for consumer marketing communications, according to an RVIA news release.

The information will continue to be updated as RVIA conducts future research and gathers more data.

Please visit RVIA.org for the most up-to-date version or contact Kevin Broom in RVIA’s Public Relations department at (703) 620-6003 (ext. 304) or kbroom@rvia.org..

  • RV travel is a great value. The PKF Vacation Cost comparison study shows that a family of four can save 26-to-71% on vacation costs depending on the type of trip and type of RV used. More than 80% of RV owners say their RV vacations cost less than other forms of vacation.
  • The latest Campfire Canvass survey of RV owners reveals that 53% intend to use their RVs more this spring/summer despite higher fuel prices. Another 38% say they’ll use their RVs the same amount.
  • Many RV owning families plan to take shorter but more frequent trips in their RVs. 63% plan to spend five or more weekends in their RVs this spring/summer. 19% will reserve a seasonal site at a campground this summer, and visit it on weekends.
  • When fuel prices rise, RVers adjust by traveling to destinations closer to home, driving fewer miles, and staying longer in one place, according to surveys of RV owners conducted by RVIA and CVENT, a leading provider of online surveys and research technology.
  • More than 80% of RVers say their RV vacations cost less than other forms of vacation, even when fuel prices rise.
  • To save on fuel, RVers typically spend more time enjoying the campground experience and less time on the road. More than 16,000 campgrounds nationwide give RVers the flexibility to save fuel and cut costs by staying closer to home. Whether they travel five miles or 500, they can still enjoy a great outdoor experience.
  • Fuel prices would need to more than double from their current level to make RVing more expensive for a family of four than other forms of travel, according to PKF Consulting. PKF’s spring 2008 vacation cost comparison study shows that RV trips remain the most affordable way for a family to travel because of the significant savings on air, hotel and restaurant costs, which continue to rise.
  • Fluctuating fuel prices affect the cost of all modes of travel and transportation. Airfares and hotel rates rise rapidly when fuel costs increase.
  • Many RV owners surveyed take additional measures to reduce fuel consumption through simple steps like driving 55 instead of 65 mph, packing lighter to reduce weight in the RV, and turning off home utilities to save energy when traveling. RVers travel at a leisurely pace with no tight schedules for flights, hotels or restaurants.

44% Favor Eliminating Federal Gas Tax for Now

May 9, 2011 by · Comments Off on 44% Favor Eliminating Federal Gas Tax for Now 

Voters strongly believe the government can do something to lower rising gas prices, but they have mixed feelings about dropping the federal gas tax.

A new Rasmussen Reports national telephone survey finds that 44% of American Adults say the government should eliminate the federal gasoline tax until prices at the pump come down. But 35% disagree and say the government should not eliminate this tax. Twenty-one percent are not sure.

In early April 2008, the last time gas prices soared, 60% of Americans believed the federal tax on gasoline should be suspended until prices went down.

The federal excise tax on gasoline is 18.4 cents per gallon for regular.

With gas prices nearing record highs, an overwhelming majority (67%) believe the government has the power to lower these prices in the short-term. Fourteen percent don’t share that assessment, and 19% are undecided. The question did not specify what kinds of things the government might be able to do.

Thirty percent of Americans, however, blame government regulations for the high gas prices. Thirty-four percent (34%) say oil speculators, those who buy and sell large quantities of oil on international markets, are more to blame. Sixteen percent (16%) say the unrest in the Middle East is the chief cause of the high prices. Thirteen percent think something else is to blame.

The survey of 1,000 adults nationwide was conducted on April 30-May 1, 2011 by Rasmussen Reports. The margin of sampling error is +/- 3 percentage points with a 95% level of confidence. Field work for all Rasmussen Reports surveys is conducted by Pulse Opinion Research LLC.

Women favor temporarily dropping the gas tax more than men do. Adults who earn less than $40,000 like that idea more than those with higher incomes.

Investors are less confident than non-investors that the government can do something in the short term to lower gas prices. Fifty-three percent of non-investors support temporary elimination of the federal gas tax, but investors are narrowly divided on the question.

While 55% of Republicans believe the government should eliminate the federal gas tax until prices come down, just 39% of both Democrats and adults not affiliated with either political party agree. But two-out-of-three adults in all three groups share the belief that the government can do something to lower gas prices in the short term.

Fifty percent of Republicans think government regulations are to blame for high gas prices, compared to 16% of Democrats and 21% of unaffiliateds. Democrats and unaffiliated adults tend to blame speculators.

Researcher Sees Chance for Lower Fuel Prices

April 13, 2011 by · Comments Off on Researcher Sees Chance for Lower Fuel Prices 

The director of research at Ball State University’s Center for Business and Economic Research in Muncie, Ind., is suggesting gas prices could drop quickly once the turmoil in north African and the Middle East calms down.

Dagney Faulk says the political unrest is the key factor in driving up the cost of crude oil, which is forcing the price at the pump to reach $4 per-gallon throughout Indiana, Inside INdiana Business reported.

Members of the Indiana Senate this week passed a resolution encouraging the U.S. to import more oil from Canada instead of the Middle East.

The resolution refers to a U.S. Department of Energy study that finds growing Canadian oil sands importation by the U.S. has to potential to substantially reduce dependency on non-North American sources.

It also points to oil companies making commitments to upgrade and expand refineries in the Midwest to make gasoline from Canadian oil derived from tar sands.

The includes the massive upgrade at the BP Refinery in Whiting, Ind.

But Faulk says importing more oil from Canada, is not likely to be a long-term solution.

Gasoline Prices Fall Ahead of Labor Day

August 30, 2010 by · Comments Off on Gasoline Prices Fall Ahead of Labor Day 

There is good news at the gas pump, as Americans get ready to fill their cars, RVs and boats for the Labor Day weekend, Associated Press reported.

The national average price for gasoline has been falling steadily this month, reaching $2.678 for a gallon of unleaded today (Aug. 30), according to AAA, Wright Express and Oil Price Information Service. That’s about 6 cents a gallon less than a month ago and 7 cents less than it was on the Friday before the July Fourth weekend.

West Coast drivers pay the most for gas — between $2.792 a gallon and $3.539 a gallon. The cheapest gas is in Texas, the Gulf Coast states and parts of the Midwest, where prices range from $2.431 to $2.523 a gallon.

A plunge in wholesale gasoline prices earlier this month is pushing down prices at the pump, PFGBest analyst Phil Flynn said.

The price drop comes as the summer driving season ends, and gasoline supplies remain nearly 12% above the five-year average with overall demand below pre-recession levels.

Most analysts believe retail prices will continue to fall into Labor Day weekend and continue to retreat in September.

“After the Labor Day weekend, the summer driving season is basically over. We’re going into the weakest demand period of the year,” Flynn said.

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