AAA Reports Gas Prices Set Record Highs, Are 65.5 Cents Higher Than 2004

BURNSVILLE, Minn., Aug. 16, 2005 -- The nationwide average price for self-serve regular gasoline has set a new record high price everyday since August 8, 2005, when the price of self-serve regular fuel was $2.339 per gallon. Since that date, the price has increased an additional 18.5 cents and currently is $2.524 per gallon. The national current price also is 20.4 cents higher than one month ago and 65.5 cents higher than last year.

"Our current record-setting prices fuel the public's speculation of $3 per gallon gas, fuel shortages and a downturn in the U.S. economy," said Gail Weinholzer, AAA Minnesota/Iowa spokesperson. "Looking at several current facts, however, makes these worst-case scenarios unlikely."

First, today's national average price remains approximately 50 cents below the inflation-adjusted record-high price of $3 per gallon set in the early 1980s. A 50-cent-per-gallon increase, while not out of the question, will become increasingly difficult to achieve as autumn approaches and U.S. demand for gasoline usually drops.

Second, for a typical family, the approximate $3,000 per year spent to fuel two average vehicles ($2.50 per gallon x 1,200 gallons of gasoline) is only 7 percent of an average total household income (about $43,000 per year, according to the U.S. Census Bureau). In many families, gasoline expenditures are an even smaller portion of a household income. This fact has tended to soften the total economic impact of even today's high prices on the national economy. Plus, most economists expected the U.S. economy to grow by more than 3 percent this year.

Third, although there remains the possibility that some unknown terrorist or military action could temporarily interrupt the flow of oil from various parts of the world, there is no shortage of crude oil at this time. The American Petroleum Institute and the U.S. Department of Energy show there is more oil available for refining in the U.S. now than there was this time last year.

Regardless of pump prices, AAA advocates for practical fuel conservation measures, including keeping vehicles well-maintained, holding speeds down, combining trips and purchasing more fuel efficient vehicles when looking for a new car.

Reports for August 16, 2005, reflect the following average prices per gallon for self-serve, regular unleaded gas:

                                    Current        Month Ago      Year Ago
   National                          $2.52           $2.32         $1.86
   Iowa                              $2.45           $2.24         $1.78
   Cedar Rapids                      $2.46           $2.25         $1.76
   Davenport                         $2.49           $2.26         $1.80
   Des Moines                        $2.45           $2.20         $1.73
   Sioux City                        $2.46           $2.21         $1.80
   Waterloo                          $2.39           $2.22         $1.70

AAA's Fuel Gauge Report is based upon data from the Oil Price Information Service, the nation's most comprehensive source of petroleum pricing statistics, and can be found at http://www.fuelgaugereport.com/ .

AAA ( http://www.aaa.com/ ) offers automotive, travel, insurance and financial services to more than 45 million members in the United States and Canada. AAA Minnesota/Iowa is part of The Auto Club Group, with 4.1 million members in eight Midwest states.