Ted Simons: Gas prices are on the increase in Arizona and much of the country as the summer travel season approaches its peak with the 4th of July weekend. Linda Gorman of AAA Arizona joins us now to discuss gas prices and other things we need to know for the holiday weekend. Good to see you again.
Linda Gorman: Thank you for having me.
Ted Simons: Prices heading into the 4th of July weekend on the up huh?
Linda Gorman: They are, about seven cents since this time last week, but when you look at where we were this time last year, we're only up about 12 cents. But you’re right, prices are heading up there, about and $3.59 is the statewide average and July represents the highest month yet that we've paid all year.
Ted Simons: And compared to national prices?
Linda Gorman: National averages are a little higher, they're at about $3.67, so that’s about eight cents higher, there are a couple factors going on in the east right now that are tugging up those prices as well as in California, which holds the highest gas prices in the continental U.S.
Ted Simons: I was going to say, California folks are thinking about driving over there, prepare for the sticker shock. What was it $4.12 or something like that along those lines?
Linda Gorman: Yeah right above $4.10 a gallon depending on what part of California, but as soon as you hit that border, and even before in some cases you're going to definitely feel the sticker shock.
Ted Simons: Why are they so high?
Linda Gorman: California's typically always a bit higher than Arizona. They have stricter clean air laws there, so it costs more to produce that gasoline. It's cleaner burning and anybody who has visited California in the last few years versus say 10 years ago. You can notice a difference in the air, so that cleaner air does come at a price though when you look at your tank.
Ted Simons: Interesting, as far as Arizona is concerned, it sounded like June was a pretty low month overall. Correct?
Linda Gorman: Yes, June was low, it was actually very low. Second lowest in the last five years. So interesting situation what's going on with gas prices right now is typically we see our highest prices peak earlier. So around Memorial Day we start to see prices peak and sometimes that's the highest price we'll see all year. That didn't happen this year. The high prices were delayed a little month. We got through May pretty well, got through June really well and then July unfortunately this first week, the last week leading into July and the 4th of July holiday we’ve seen those prices tug up.
Ted Simons: So what happened there, why the change?
Linda Gorman: Well a couple of things, oil prices are really high right now, trading over $100 a barrel, closed at about $104 a barrel today. Tensions again in Iraq, not a new story, certainly old news. Tensions in Libya. As well as our first hurricane of the season, Tropical Storm Andrew -- Arthur, excuse me, is looking to make landfall Thursday or Friday. So what's happened is it's too soon to tell whether or not that tropical storm will impact any production. But most of those refineries along the East Coast will close down their facilities just as sort of a safeguard measure.
Ted Simons: Interesting. All right as far as Arizona is concerned, where are the highest and lowest prices in the state?
Linda Gorman: Scottsdale, east valley, highest, lowest are going to be Yuma, Tucson, some parts of the west valley. Metro Phoenix usually stands right around in the middle. You can definitely beat the statewide average if you do your homework. So while we always recommend that it doesn't make too much sense to drive too far out of your way, you definitely want to do your homework. Don't assume that the gas price that you see at your neighborhood, on the corner there is the best you're going to get.
Ted Smons: Even within the metro region, there are wide disparities?
Linda Gorman: I wouldn't say wide disparities. You know, five, six, seven cents a gallon, but that does add up. So there are many resources, many tools, AAA has one that can help you do your homework before you even leave the house.
Ted Simons: Are the prices, the increases that you're seeing, does AAA expect that to affect travel plans too much?
Linda Gorman: Not so much. You know you're looking at 12 cents a gallon, versus this time last year. So when you look at a 20 cent or a 20-gallon tank, we're not talking big dollars there, but it does add up. But we don't expect that it's going to impact travel, and in fact when you look at the numbers for this independence day, we're expecting nearly 800,000 Arizonans to be hitting the roads and the sky, so that's about a 1% increase over last year. But a 10% increase over Memorial Day. So when you think -- When you look in May we had fairly low prices, we have higher prices in July, that's just not deterring those people who want to celebrate for the 4th.
Ted Simons: All right, and usually we talked about this before, it's that $4 a gallon barrier where people start saying, I gotta knock it off a little bit.
Linda Gorman: Yeah, interesting it used to be $3 so.
Ted Simons: Yeah, now it’s 4.
Linda Gorman: It seems like a long time away, but yeah now it's $4, seems to be what we've seen as sort of the psychological tipping point where people really start to cut back.
Ted Simons: Any changes, what do you see now for the rest of the summer?
Linda Gorman: Well a lot of it depends on how active the hurricane season is. So NOAA had said that they predicted less active season than normal. So that could bode well or it could bode not so well. They’ve typically been right the last couple of years. Hurricanes are very important to prices because it can impact -- Even the threat of a hurricane as we're seeing this week can impact production, which can tug at demand and supplies and can artificially even raise those prices temporarily.
Ted Simons: And I guess the hurricane dynamic and what's happening in the Middle East, that particular metric, that's for the rest of the year as well, forget the summer, the rest of the year. A little volatile out there?
Linda Gorman: It is a little volatile, not as volatile as it has been in years past, and in particularly Arizona. If we were looking at five years or so ago when we had very limited supply coming into the state, we were very reliant on the west side, on the pipelines, we would be looking at a much more volatile situation. But it hasn't been as volatile in the past couple of years since we've had those pipeline expansions. But certainly any time throughout October, early November, hurricanes are always a threat.
Ted Simons: All right, good information. Good to see you again. Thanks for joining us.
Linda Gorman: Nice to see you. Thank you.