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It's no surprise that Florida is a big beneficiary of lower oil prices. To the delight of the hospitality industry, Americans are driving to the Sunshine State in record numbers, filling hotel rooms, restaurants and attractions statewide.
And the outlook remains bright, according to motor club AAA.
For one, the nuclear deal with Iran could add more supply to energy markets. “The market is already saturated,” says Mark Jenkins, a spokesman in Tampa for The Auto Club Group, the second-largest AAA club in North America.
Even before the Iran deal, the U.S. Energy Information Administration forecasted another 50-cent drop in gasoline prices by the end of the year.
Already, average prices of regular unleaded gasoline in Florida have declined about 25% from a year ago, according to data compiled by AAA. Tourists who fill up their cars in Tennessee and Georgia pay less than in Florida, likely generating more traffic from those states.
But Jenkins cautions that lower fuel prices lead to higher demand, which explains why gasoline prices aren't falling more rapidly despite the supply glut. “Demand is at its highest level since 2007,” Jenkins says. “The last time oil prices were at this level, gasoline was 20 cents cheaper.”
Also, gas stations have to sell the fuel they purchased at earlier prices so consumers don't see falling prices as fast as oil traders.
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