Gas prices expected to hit six-year high during July 4 holiday

Independence Day vacationers looking to hit the crowded highways during the long Fourth of July weekend will have to shell out a little more of their hard-earned dollars for fuel in Arkansas and the rest of the U.S., industry analyst say.

U.S. drivers will pay the most expensive July 4th gas prices since 2008, primarily because Iraqi violence has increased global petroleum costs, the AAA said in its monthly gasoline report released on Monday.

“Most drivers are paying about 15-20 cents more per gallon than expected heading into the busy Independence Day weekend due to market fear about Iraq,” said Avery Ash, AAA spokesman. “It is frustrating that events overseas will make it more expensive to celebrate Fourth of July here at home.”

In Arkansas, Fourth of July motorists will pay about $3.48 for a gallon of regular unleaded up 17 cents from year ago pump prices of $3.30 per gallon and 19 cents higher than the Memorial Day weekend in late May, the traditional start of the summer vacation season. This year, the Independence Day holiday travel period is defined as Wednesday, July 2 to Sunday, July 6.

ARKANSAS METRO PRICES
As of today, the national average price of gas is $3.70 per gallon, up 21 cents from a year ago, according to the U.S. Energy Information Administration. The national average on July 4 in previous years was: $3.48 (2013); $3.34 (2012); $3.57 (2011); $2.74 (2010); $2.62 (2009); and $4.10 (2008).

Pump prices in Arkansas’ metropolitan areas range from a low of $3.42 per gallon in the Fayetteville-Springdale-Rogers and Fort Smith area to a high of more than $3.50 per gallon in the Texarkana area, according to AAA’s daily fuel gauge. Motorists in the Little Rock-North Little Rock area and Pine Bluff will pay an average of $3.46 and $3.47 and a gallon to fill up their tanks, respectively.

Drivers choosing to fill up the tanks with a higher-grade of gasoline should expect to pay an average premium of $3.77 a gallon across the state. Big rig drivers and other diesel fuel users will see pump prices at about $3.67 a gallon, up six cents from a year ago.

As those record numbers of families take to the road for some rest and relaxation, the state Highway and Transportation Department warns Arkansas drivers and motorist traveling through the Natural State they will likely face work zones and possible delays due to increased traffic volume during the long holiday weekend. There are extensive ongoing highway improvements across the state and “with those improvements come work zones,” the department said in a news release on Monday. To aid holiday travel, the state Highway Department said it has worked to open as many lanes as possible.

Still, drivers are urged to plan ahead by visiting IDriveArkansas.com for the latest travel information. The website includes live traffic flow, weather information, and details on construction zones. Travelers can also follow the department on Twitter @AHTD.

NATIONAL TRAVEL ESTIMATES
AAA Travel projects 41 million Americans will journey 50 miles or more from home during the Independence Day holiday weekend, a 1.9% increase from the 40.3 million people who traveled last year and a nearly 14% increase compared to the Memorial Day holiday weekend. The majority of travelers, more than eight in 10 (34.8 million), will travel by automobile, the highest level since 2007.

AAA Chief Operating Office Marshall Doney said notwithstanding high pump prices and crowded highways, those factors will not have a significant impact on the number of people traveling. However, it could result in some consumers cutting back on dining, shopping or other trip activities.

Doney said the recent spike in consumer spending is primarily due to increasing credit, rather than rising incomes. Consumers have been hesitant to add to their credit card balances the past several years, but continued improvements in the employment picture and rising home values means they are starting to feel more comfortable taking on debt, he said.

In addition to consumer spending, a boost in consumer confidence and the employment outlook are driving more Americans to take a road trip.

“Steady improvement in the economy has spurred increased consumer confidence and spending,” Doney said. “Optimistic Americans are more willing to take on debt this year, dusting off their credit cards to pay for a much-needed Independence Day getaway.”