Tag: gas prices

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AAA: TN Gas Prices Likely to Rise After Record Highs

(Credit: Erik Mclean on Unsplash)

Gas prices will likely rise again after a brief respite coinciding with the Memorial Day holiday, according to AAA.

Even with a bit of stabilization at the pump, Tennessee drivers paid the highest gas prices on record during this Memorial Day weekend, AAA said. The state’s average gas price is $4.28, nearly 39 cents higher than a month ago and $1.41 more than a year ago. 

(Credit: AAA – The Auto Club Group)

Memphis-area drivers saw record-setting prices at stations on Monday of last week. That’s when the average price of gas in Memphis ran $4.32 for a gallon of regular unleaded. The price had barely softened Monday, to around $4.31 for a gallon of unleaded. Average unleaded prices a year ago in Memphis were $2.89 cents per gallon.

We could be looking at the calm before the storm for gas prices.

Megan Cooper, AAA – The Auto Club Group

“While drivers might have seen a small break in pump price increases this holiday weekend, we could be looking at the calm before the storm for gas prices,” said Megan Cooper, spokeswoman for AAA — The Auto Club Group. “Crude oil prices surged to $115 per barrel last week alongside further tightening of domestic supplies. Renewed upward pressure on pump prices likely means additional increases in pump prices for drivers in the next couple of weeks.”

Prices may also rise due to ongoing fears of further global supply constraints caused by a European Union (EU) ban on Russian oil exports. U.S. gas demand may again start to climb as drivers fuel up for the three-month-long summer travel season, which began last weekend. 

AAA estimated that nearly 35 million travelers hit the road for Memorial Day. It’s the highest number since 2019, despite record prices at the gas pump.

However, Tennessee prices remain below the national average. 

(Credit: AAA – The Auto Club Group)
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At Large Opinion

The Bottom of the Barrel

“I think gas prices are going down,” I said to no one. It was a week ago and I was alone, driving along Union and Poplar and seeing posted prices as low as $3.59 a gallon. I was sure I hadn’t seen prices below $4 a gallon in a while, but the news had been filled with “sky-rocketing gas prices” stories for weeks (accompanied by grim analyses of how inflation was going to cost the Democrats the midterms), so maybe I was imagining things?

Then, on Monday, I got an email from GasBuddy, a tech company based in Boston that operates apps based on monitoring real-time fuel prices at more than 150,000 gas stations in the United States, Canada, and Australia. Each week, GasBuddy sends me a weekly update on the country’s gas prices. I usually send it to junk mail, but not this week. According to GasBuddy, prices in Memphis are 17.4 cents a gallon lower than they were a month ago, down to $3.42 a gallon, if you know where to look. Nationally, gas prices are down 23.3 cents a gallon from a month ago. This is good, right? So why is it not news? Maybe it’s because a “falling gas prices” story doesn’t fit a defining media narrative. Or maybe there’s just too damn much news — most of it bad — to keep up with.

Consider, an English teacher in Southeast Missouri was just fired for teaching “Critical Race Theory” in an elective contemporary literature class that was reading the award-winning book, Dear Martin. It was Kim Morrison’s second year teaching the young adult novel, but earlier this year, Missouri passed a bill outlawing the teaching of CRT and parents complained, you see, so …

Oh, and let’s not forget the case of a woman in Texas, Lizelle Herrera, who was indicted for murder for “the death of an individual by self-induced abortion.” It was unclear whether Herrera induced her own abortion or someone else’s, but, you know, details aren’t really important in these matters. Herrera was later released because Texas’ new law banning abortions after six weeks is only enforceable if charges are brought by a private citizen, i.e. a vigilante, and local law enforcement had overstepped their authority. Shocker, I know.

But wait, there’s more. All over GOPutin America, legislators are rushing to emulate bills like these, as well as those similar to Florida’s spiffy new “Don’t Say Gay” bill, which eliminates the nonexistent threat of kindergartners being taught anything about LGBTQ humans.

In Tennessee, legislators are not about to be left behind their Neanderthal red-state brethren. They had been working diligently to pass into law a bill that would remove age limits for marriage, because young girls, they do get weary and sometimes just need a husband who will help them with their homework. A national outcry got our Nash-billies to back off. For now.

Speaking of national outcries … The New York Times did a big story this week on Hillsdale College’s fight against “leftist academics,” which mainly consists of getting state legislatures to give them public money to start charter schools in suburban and rural areas (white) to, as the Times put it, “provide a publicly funded off-ramp for conservative parents who think their local schools misinterpret history and push a socially progressive agenda.”

Our own Governor Bill Lee got a lot of ink in the story as the leading Hillsdale proponent in the country among public officials. Lee, you may recall, intends to give Hillsdale College enough of our tax dollars to fund 50 private charter schools in Tennessee.

And, as long as I’m writing about embarrassing Tennessee elected officials, I’d be remiss in not mentioning Senator Marsha Blackburn’s apparent flashing of the “white power” hand symbol in the Senate chambers while questioning Secretary of Defense Lloyd J. Austin, who is — shocking, I know — African American. Way to go, Marsha. In a week with tons of disgusting news, you found the bottom of the barrel and scraped it.

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News News Feature

Gas Prices: It’s Always Supply and Demand

Photo: 123elis | Dreamstime.com

News is still moving very quickly regarding the global impact of conflict in Ukraine. The inevitable impact to energy markets is still coming into focus, but some common misconceptions about supply and demand implications of oil are worth discussing now.

Russia is said to represent approximately 10 percent of world daily oil production, which after domestic use means they export somewhere in the mid-single-digits of net world oil exports. For our purposes we will call it 5 percent. If we suddenly removed 5 percent of daily oil production from the world market, what impact would that have on oil prices? The answer is not straightforward; to figure it out we have to consider what economists call elasticity of demand.

A perfectly elastic good would mean that demand is infinite at one price and zero at a slightly higher price. An example would be a store selling one-dollar bills. Priced at $1, the store would just be a complicated ATM. Price them at 99 cents and I’d borrow money to buy as many as possible. Price them at $1.01 and I wouldn’t buy a single one. That’s a perfectly elastic good.

On the other end of the spectrum would be a perfectly inelastic good. The most common example is a lifesaving medicine. If 100 people a year need it and 100 doses are produced each year, the price might be $100. If only 99 doses were produced, the price wouldn’t rise to $101 — in fact, there’s no theoretical maximum price. Hopefully there would be a fair way to allocate this medicine, but someone is going to be very disappointed no matter what. They don’t call economics “the dismal science” for nothing!

Oil demand is relatively inelastic. If oil production representing 5 percent of daily demand suddenly went away, prices would start rising and continue to rise until we felt enough pain to reduce worldwide oil consumption by 5 percent — that could be at $5/gallon of gas, $10/gallon, or more. There’s no way of knowing for sure.

Is there any way around this? Regulations or voluntary measures to cap oil prices sound great, but just like rent controls in NYC, price control comes with a cost. At a lower price, demand would greatly exceed supply, so any sort of meaningful oil price controls would have to be combined with extreme shortages or extremely unpleasant rationing. Consumption would have to fall somehow — the world can’t consume more oil than is produced forever (though production would certainly ramp up elsewhere over time).

The fact that the U.S. produces a lot of oil so we don’t “need” Russian oil and don’t import much today doesn’t mean prices necessarily stay low in America. If oil was $25/barrel in the U.S. and $200/barrel in Europe, Europeans would buy U.S. oil and ship it to Europe as fast as they could sail tankers, eventually finding a new equilibrium price somewhere between the two. Could we put some sort of export control in place to prevent this? Possibly, but the ripple effects from such a move would likely be extremely chaotic, ineffective, and even counterproductive.

There are powerful forces pushing prices higher aside from simple corporate greed. Oil companies aren’t blameless, but oil markets are more complicated than they might seem on the surface. If you’re convinced the oil companies are getting away with something here, why not put everything you have in oil stocks? That’s obviously not a good idea — returns on oil stocks are likely not going to feel like a windfall from here when prices inevitably come back down. In the end, even oil company executives would agree that a peaceful end to hostilities in Ukraine and a normalization of prices, trade, and economic activity is the best outcome for all, an outcome we all hope can be realized very soon.

Gene Gard CFA, CFP®, CFT-I™ is Chief Investment Officer at Telarray, a Memphis-based wealth management firm that helps families navigate investment, tax, estate, and retirement decisions. Ask him your question at ggard@telarrayadvisors.com or sign up for the next free online seminar on the Events tab at telarrayadvisors.com.

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News News Blog News Feature

Ukraine Invasion Raises Gas Prices in Tennessee

Credit: AAA

The tanks rolling on Ukraine have arrived at Tennessee gas pumps.

AAA, the auto club and gas price watcher, said average gas prices in Tennessee have jumped 15 cents in the last week. Prices have jumped 35 cents in the last month and 94 cents over the last year. 

The latest increase, AAA said, is directly connected to Russia’s invasion of Ukraine. The move roiled the oil market with crude spiking over $100 per barrel before settling back into the mid-$90 range. 

“Russia’s invasion and the responding escalating series of financial sanctions by the U.S. and its allies have given the global oil market the jitters,” said Megan Cooper, AAA spokeswoman. “Like the U.S. stock market, the oil market responds poorly to volatility. This serves as a reminder that events on the far side of the globe can have a ripple effect for American consumers.” 

AAA said U.S. gas stocks decreased by 600,000 barrels last week to a total of more than 246 million barrels. Gas demand rose slightly here at the same time. Together, lower supply and higher demand are expected to continue to push gas prices higher. 

Tennessee ranks seventh among U.S. states for the largest weekly increase. The highest 10 percent of pump prices across the state are around $3.69 for regular unleaded. The lowest 10 percent are around $3.19, AAA said.   

Memphis had some of the least expensive gas prices in the state with an average price of $3.40. Nashville had the highest at around $3.53 per gallon.  

Credit: AAA

The lowest gas price in the Memphis area is the Kick Stop in Horn Lake on Goodman Road. A gallon of regular was listed there at $2.89 per gallon, according to the Gas Buddy website. This was followed by the Marion, Arkansas Walmart ($2.95) and the Memphis Exxon on Perkins ($2.95). 

To cut your fuel bill, AAA suggests limiting your drive time, removing excess weight in your car, driving conservatively, and consider paying cash as some retailers charge more for customers using cards. 

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News News Blog

Near-Record Numbers Hitting the Road This Thanksgiving

CREDIT: TDOT

TDOT

More than 1.3 million Tennesseans will hit the road this Thanksgiving holiday in what AAA is projecting to be the second-highest Thanksgiving travel volume since the auto group began tracking in 2000.

More than 55 million Americans are expected to travel 50 miles or more away from their homes over the next few days, according to AAA’s annual report. The figure is up by 1.6 million travelers over last year and just shy of the record set in 2005.

“Millions of thankful Americans are starting the holiday season off right with a Thanksgiving getaway,” said Paula Twidale, vice president of AAA Travel. “Strong economic fundamentals are motivating Americans to venture out this holiday in near-record numbers. Consumer spending remains strong, thanks to increasing wages, disposable income, and household wealth, and travel remains one of their top priorities for the holiday season.”

In all, 49.3 million Americans will make their trips on the roads, according to AAA. In Tennessee, 1.2 million travelers will hit the road this year. With that, AAA said roads will be the worst on Wednesday.

“With record levels of travelers and persistent population growth in the country’s major metropolitan areas, drivers must prepare for major delays,” said Trevor Reed, transportation analyst at INRIX, a traffic data company. “Although travel times will peak on Wednesday afternoon nationally, travelers should expect much heavier than normal congestion throughout the week.”

AAA

Fuel prices
While fuel prices have been up and down lately, they are now slightly cheaper than the national average at the same time last year. As of Tuesday morning, Tennessee regular gas prices were about $2.30, the same as they were a year ago. Average prices in Shelby County and Memphis were $2.34 on Tuesday.

Tennessee is one of this week’s cheapest gas markets, AAA said. The nation’s top 10 least expensive markets are: Louisiana ($2.21), Mississippi ($2.22), Texas ($2.25), Missouri ($2.25), Alabama ($2.27), Oklahoma ($2.28), South Carolina ($2.28), Arkansas ($2.29), Tennessee ($2.30), and Virginia ($2.31).

AAA

No lane closure, but added law enforcement
For the busy travel holiday, the Tennessee Department of Transportation (TDOT) has halted all lane closures on interstates and state highways.

“This is the most traveled holiday of the year,” said TDOT Commissioner Clay Bright.  “Halting road work during this busy time will provide maximum capacity on our highways and help alleviate congestion, especially during the predicted peak travel days of Wednesday and Sunday. TDOT’s regional HELP Trucks will also be working throughout the holiday weekend to assist with incidents that may occur along the interstates.”

If you’re driving I-40, watch for Tennessee Highway Patrol troopers stationed at least every 20 miles. The Tennessee Department of Safety and Homeland Security and TDOT have partnered with law enforcement across the state for the I-40 Challenge, with the goal of having zero fatalities on the 455 miles of I-40 in Tennessee. Troopers will be out on I-40 and expect increased law enforcement on all highways.

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News News Blog

Record Number of Travelers Expected to Hit State Highways This Week


A record number of Tennesseans are expected to hit the road this Independence Day.

According to the American Automobile Association (AAA), 985,000 drivers are expected to be on the state’s roads this week. That’s nearly 5 percent more than the number of Tennesseans that traveled this time last year.

The rise state’s rise in travelers follows the national trend, as AAA estimates a record number of Americans — 41.4 million — are expected to travel by automobile this week. That’s 1.9 million more than last year.

AAA said the busiest day for driving will likely be Wednesday.

In order to make travel smoother for the nearly 1 million drivers expected to be on the state’s highways this week, the Tennessee Department of Transportation (TDOT) will suspend all construction-related lane closures beginning at noon on Wednesday until 6 a.m. on Monday.

“It is estimated that 985,000 motorists will travel Tennessee’s interstates and state routes this July 4th holiday,” TDOT Commissioner Clay Bright said. “To help motorists reach their destinations safely and without unnecessary delays, we are suspending lane closures during this holiday travel time.”

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Still, workers could be present in construction zones where reduced speed limits will remain in effect. Speeding in work zones could result in a $250 to $500 fine, according to TDOT.

AAA attributes the increase in drivers in part to lower gas prices compared to this time last year.

Memphis’s average price for a gallon of regular gas decreased by about 17 cents from this time last year.

The average price for regular gas in Memphis as of Tuesday is $2.43 per gallon. That’s a little less than Nashville’s average of $2.48 per gallon and slightly more than Chattanooga’s and Knoxville’s average prices of $2.36 and $2.39 per gallon respectively.

Across the country, gas is most expensive in California where the average price per gallon is $3.77. The country’s lowest gas prices are currently just south of Memphis in Mississippi. A gallon currently averages $2.34 there.



Try AAA’s gas cost calculator to see how much your travel plans will cost you. 

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Fly On The Wall Blog Opinion

Gas Prices are Beastly

666.9, Regular Unleaded

  • 666.9, Regular Unleaded

It’s not an especially well kept secret that Lucifer, the bright, shining angel of the pit, is responsible for rigging gas prices. This Madison Ave. sign pretty much comes out and says so.

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Opinion Viewpoint

The Memphis Week That Was

It’s the economy.

The grimmest economic picture in at least 30 years underlies school funding, property taxes, suburban flight, Grizzlies attendance, aerotropolis, stable neighborhoods, and the tenuous position of Memphis as a major-league city.

Mayor Herenton blasted the media for mistreating him and Joseph Lee, but the media should be blasted for obsessing over Herenton and the NBA draft while tip-toeing around a bigger story.

The stats of O. J. Mayo and Kevin Love and Mike Miller, the odds of the Grizzlies getting the first or second pick, the relative merits of the fifth pick and the 28th pick — we were bombarded with this stuff for three weeks on television and in the daily paper, culminating in Thursday’s NBA draft.

Does anyone honestly think 14,000 people are regularly going to show up 41 times this season to watch the Grizzlies? When Peabody Place is getting out of retail and entertainment? When the Redbirds are struggling to sell $7 tickets? When uncompleted Memphis subdivisions are selling for pennies on the dollar? When the very survival of Ford, General Motors, Morgan Keegan, and First Horizon as we have known them is in question? And we’re talking about the injustice of Chris Douglas Roberts going in the second round and not getting a guaranteed contract?

Here are the stats that matter. Oil $140 a barrel. Gasoline, $4 a gallon. FedEx stock $78, down from $119 a year ago. First Horizon $7.50, down from $39. Regions Financial $11, down from $35. Suntrust Banks $37, down from $90. International Paper $23, down from $41. Northwest Airlines $6, down from $24. Pinnacle Airlines $3, down from $20.

General Motors, once the symbol of American industrial might, is $11, down from $43. Its stock market value is $6.5 billion. Some American businessmen are worth more than that.

Those companies have a big Memphis and Tennessee presence, and thousands of their employees have lost their savings and some of them will lose their jobs and we’re supposed to worry about a basketball team?

Reporters and sports executives act like the sports world and the business world are in separate universes. In the 1970s, an NBA player was doing well to make $200,000. The NBA salary structure that pays Pau Gasol $14 million and Brian Cardinal $7 million for a season is as unsustainable as the $40,000 SUV or the third shift at Ford and GM or the $120 round-trip ticket on Northwest. Business cuts jobs and wages and closes plants or cuts services. The NBA and the Grizzlies tweak their marketing campaigns.

Watch the bottom fall out of the sports and entertainment market in 2009. Last season, a Grizzlies crowd of 11,000 was alarming. This season, 11,000 could be encouraging. Watch a couple of the Tunica casinos closely. Watch expensive restaurants close. Watch for some private schools to close. Watch for more malls to close. Watch for a surge in free, neighborhood-based entertainment like the upcoming concert series this fall at the renovated Overton Park Shell. The easiest way to save money is to cut out $40 tickets, unnecessary driving, and $7 drinks.

And watch for city and county government to make hundreds as opposed to scores of layoffs in 2009, when state and federal funds dry up and homeowners get their new property reappraisals that reflect the decline of 25 percent or more in the value of their homes. And if they don’t get a reduction, watch for a stampede to the assessor’s office and the board of adjustment by homeowners and businesses making appeals.

In all the commotion and outrage over Joseph Lee, it seems something is being overlooked. The former president of MLGW could have spared himself a lot of grief by having a conversation with former City Councilman Edmund Ford that went something like this:

“Councilman, you’re behind on your electric bill. You’ve been behind for a while. You’re putting me, the board, and this company in a bad spot. I needed council approval to get this job. I needed your support as chairman, especially. I appreciate that, but you’re testing my patience.

“Here’s the deal. If this bill isn’t paid within a week, I’m going to have a press conference. I’m going to bring your utility bills, and I’m going to explain exactly what I am doing and why I am doing it so there won’t be any misunderstanding or, heaven forbid, charges of wrongdoing.

“This looks fishy. Anyone can see that. So I’m not just going to cover my butt, I’m going to do it before somebody else tries to get me in a jam.

“The choice is yours. Pay up, or I go public. If it makes you look like a deadbeat, that’s your problem. You can join me at the press conference if you want to go that route, but we’re not going to hide anything. See you.”

Federal prosecutors in Memphis did what they had to do in dismissing their case against Lee and Ford. Prosecutors are not supposed to bring a case unless they think they can win it at trial. After Ford was acquitted by a jury — even though the jury watched videotapes of Ford taking payments from Joe Cooper — it was extremely unlikely that a jury would convict Ford and Lee. That doesn’t mean they didn’t think they had a case.

Interesting item in The Wall Street Journal this week. FedEx was named as one of three companies that are “baring their claws” during tough times and aggressively going after greater market share at the expense of their weaker competitors. In other words, the strong shall survive. Maybe in five years we’ll see 2008 as a pivotal year for FedEx, in a good way.

There’s reason for long-term optimism about the Northwest-Delta merger and Memphis International Airport as well. Delta CEO Richard Anderson seemed genuine when speaking about keeping the Memphis hub, albeit in a reduced capacity. He restated his optimism about the merger in national newspapers last week. And, for what it’s worth, he carried his own luggage to his car after speaking at a Memphis Chamber of Commerce event a couple weeks ago.

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News The Fly-By

Gas and Go

Memphian Megan Harrison recently considered trading in her 2006 Ford Explorer for something a little more economical.

“When I went to the dealership, I was told that the trade-in value on my truck would only be around $12,000 or $13,000. At the time, I owed $22,000,” Harrison says. “I was shocked.”

Harrison decided to keep the Explorer but is still faced with filling up the gas tank twice a week, at about $70 a pop.

“With my note plus gas, it’s like paying for a small apartment each month,” she says. “But I can’t get out of it. I’m stuck.”

Harrison isn’t the only one stuck. With oil nearing a staggering $126 a barrel for June — and gas at an average $3.50 a gallon in Memphis — data suggests that the American love affair with sports utility vehicles (SUVs) and large cars may be over.

National SUV sales for April fell more than 32 percent from last year, and small-car sales rose almost 19 percent. Locally, some dealerships claim that Southerners will always want larger vehicles for hunting and fishing, but other dealerships say they’ve already noticed a change in sales.

Chuck Palmore, vice president and general manager of Chuck Hutton Auto Group in Memphis, says that sales of smaller, fuel-efficient models have increased notably. At the same time, car manufacturers are offering more incentives on larger vehicles.

“We have seen a move away from the less fuel-efficient vehicles and into fuel-efficient cars and smaller SUVs, like the RAV4,” says Palmore. “The hybrid models — Camry, Highlander, and Prius — are selling as fast as they come in.”