NATIONWIDE AVERAGE COST FOR A GALLON OF REGUALR GAS IS 10 CENTS AWAY FROM $4
TAMPA, Fla. (March 25, 2012) – Just about everyone is aware of the ever-increasing rise in retail gas prices and it’s something motorists have dealt with January 1. Pump prices have steadily increased week after week from the January 1 average of $3.27. Today, the national average is $3.89, almost 10 cents away from $4 a gallon after increasing 6 cents from last week. If prices continue to inch up an average of 5 cents a week, the national average for a gallon of regular retail gasoline could hit $4 by the first week of April for the first time in history.
“The factors causing gas prices to increase are the same ones we’ve been hearing and reading about for the last three months, however as prices inch up, more motorists are looking for someone or something to blame. Unfortunately, it’s the retailers that take the brunt of the blame since they are the most visible to motorists, and drivers see the retailer as the one who puts $4 on the marquee and takes their hard-earned money, when in fact, retailer profit margins shrink the more gas prices increase,” said Jessica Brady, AAA spokeswoman, The Auto Club Group.
As gas prices climb, many retailers across the U.S. are seeing their profit margins tumble. For example, retailers in the Great Lakes and Southeast have hit single-digit profits before having to pay credit card processing fees that can range from 7 to 9 percent. Retailer profit margins in Florida, Georgia, and Tennessee average 10 cents to the gallon, meaning the retailer will make less than $1.50 from the fill-up of a 15-gallon gas tank after paying credit card fees. The majority, 76 percent, of the cost of a gallon of gas goes to the cost of crude oil, with 12 percent going to taxes, 6 percent to refineries, and the remaining 6 percent is split between transportation costs and retailer profits.
As mentioned above, 12 percent of the cost of a gallon of gas goes to taxes. Taxes are a major factor that contribute to the difference from one state’s average cost of a gallon of gas to another. Nationwide, taxes average about 48.8 cents per gallon. Florida taxes make up an average of 53.4 cents of the cost of a gallon of gas. Georgia taxes account for approximately 47.8 cents per gallon and Tennessee’s taxes add about 39.8 cents to the cost of a gallon of gas.
“The price of a barrel of oil is still holding steady around $107 a barrel, but as seen in prior weeks, retail gas prices continue to rise,” said Brady. “Motorists can expect prices to increase well into spring, however year-to-date price trends mirror that of 2011. If the trending continues like last year, we could see pump prices peak in May and then start to retreat.”
The price of a barrel of oil settled Friday at $106.87 on the New York Mercantile Exchange—$1.19 less than the week prior.
The national average price of regular unleaded gasoline is $3.89, a 6-cent increase from last week. Florida’s average of $3.90 increased 8 cents, while Georgia’s average of $3.79 and Tennessee’s average price of $3.71 both increased 7 cents from last week, respectively. Visit AAA’s Daily Fuel Gauge Report to find national, state, and local metro market retail gasoline prices.