AAA Reports Gas Prices Averaging Near $1.50 Before Memorial Day

MINNEAPOLIS, May 13, 2003 -- The nationwide average price of self-serve regular unleaded gasoline has dropped an average of 10.5 cents per gallon since mid-April to $1.50, and is now at its lowest price since the end of January 2003.

While this price is approximately 10 cents per gallon higher than one year ago, it is more than 20 cents cheaper than May 2001. The wide difference in late spring gasoline prices during the last three years reflects the considerable stress gasoline producers have encountered in meeting the ever-increasing demand for gasoline by the U.S. while shifting to more expensive, cleaner-burning fuels each summer.

"The current gas price average is an encouraging development as Americans prepare for the start of the summer driving season, which traditionally begins with the Memorial Day holiday," said Dawn Duffy, AAA spokesperson. "These pump prices reflect a decline in the price of crude oil since the start of Operation Iraqi Freedom, a gradual increase in oil and gasoline production from Venezuela and rising gasoline imports from Europe."

Crude oil prices that reached nearly $40 per barrel prior to the war now are less than $28 today.

Reports for May 13, 2003, reflect the following average prices per gallon for self-serve, regular unleaded gas:

                                   Current        Month Ago      Year Ago
   National                         $1.50           $1.60         $1.40
   Iowa                             $1.43           $1.50         $1.35
   Cedar Rapids                     $1.42           $1.48         $1.28
   Davenport/Moline/Rock Island     $1.45           $1.51         $1.34
   Des Moines                       $1.41           $1.51         $1.35
   Sioux City                       $1.40           $1.49         $1.31
   Waterloo/Cedar Falls             $1.38           $1.48         $1.31

AAA believes gasoline prices will remain near their present level of $1.50 per gallon throughout most of the summer driving season unless the industry suffers an extended loss of refining or distribution capacity due to operational problems, or a significant downturn occurs in gasoline imports.

U.S. gasoline refineries are estimated to be running at full capacity (at approximately 95 percent) and sufficient gasoline import are meeting American demands. The U.S. no longer produces enough gasoline domestically to meet its needs during the summer driving season and will need to import nearly 1 million barrels of gasoline per day to meet projected consumer demand.

AAA's outlook for summer gasoline prices also assumes the price of crude oil will remain in a trading range of between $24 - $26 per barrel for much of the summer.

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.

AAA 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, which has 4.1 million members in eight Midwest states.