Gas prices in Florida hit $3 per gallon this week, with the rest of the nation not far behind. But potential holiday motorists dont appear to be changing their plans because of it.
The average price for a gallon of regular unleaded gas in Florida stood at $3 as of Wednesday, according to AAAs Daily Fuel Gauge Report. Nationwide, the average was $2.98.
Floridas gas prices have risen steadily since September when the average was $2.67, after remaining flat for much of the summer. That is an unusual phenomenon, since gas prices typically increase along with demand in the summer months.
Its been an atypical year this year. We usually see gas prices reach their peak in July, and instead we actually saw them reach their peak in April/May, said Jessica Brady, public relations manager of AAA South.
Rising global demand, a stronger U.S dollar and positive job numbers in the fall combined to spark the increase in crude oil prices, which currently stand at $88 per barrel.
After (October), its been a combination of a fluctuating U.S. dollar and speculation that growth is on the rise and will continue, said Brady, explaining the increase in gas and crude oil prices.
The higher cost of travel, however, isnt changing holiday travel plans. A separate report released by AAA Wednesday predicts that year-end holiday travel will increase by 3.1 percent over last year.
AAA predicts that about 92.3 million Americans will venture more than 50 miles from their home between Dec. 23 and Jan. 2, compared to the 89.5 million who did so last year. Moreover, 93 percent of travelers are expected to go by cars or vehicles, and the average round-trip travel distance is projected to be 1,052 miles --33 percent higher than last year.This is further evidence that consumers are unfazed by the rise in gas prices so far.
Floridas expected travel numbers reflect the nationwide trend, with more than 4.8 million residents traveling for the year-end holidays, a 3.1 percent jump from 2009.
Analysts pointed to a slowly recovering economy as one of the reasons for an expected increase in travel this year.
After a challenging year in 2009, a modestly improved economic environment and pent-up demand resulted in more Americans traveling in 2010, and the year-end holidays are no exception, said Glen MacDonell, director of AAA Travel Services.
Increased consumer confidence and an urge to travel cheaply have also contributed to the increase in drivers this holiday season. Median household spending on holiday trips is also expected to increase $24 this year to $694. Only 29 percent of travel expenditures is related to transportation, though, with the rest going toward shopping, lodging, dining and entertainment at the destination.
But dont look for gas prices to stay high after the holidays. Decreased demand will likely drive prices down to the $2.70 to $2.80 range after the new year, Brady said.
While most Floridians will be hoping gas prices drop, some will be wishing they remain high or increase further.
Nopetro, a natural gas company, opened its headquarters in Tallahassee in October, with a view toward building 12 natural-gas stations throughout Florida. The Leon County School Board moved forward Tuesday with negotiations with the company to build a station that would service school buses.
But Nopetro is hoping its client base will spread to private car owners in the coming years, something that is unlikely to happen if gas prices remain low. Jorge Herrera, CEO and co-founder of Nopetro, is convinced that wont happen.
The truth of the matter is that the price of gas is only going to continue to rise, Herrera said.
In order to alter consumer behavior and drive people toward hybrid cars and alternative fuels, however, there needs to be sustained high gas prices, such as in the summer of 2008. The highest recorded average price in Florida for a gallon of regular unleaded gas was $4.08 in July 2008.
Back in the summer of 2008 when prices skyrocketed, thats when a lot of companies started to look at natural gas, Herrera said.
Reach Gray Rohrer at grohrer@sunshinestatenews.com or at (850) 727-0859.
