The No. 2 U.S. automaker made clear this week that pressure at the pump has leaked directly onto automakers balance sheets.
Ford Motor Co. executives said Thursday, May 22, that gasoline prices were a deciding factor in its decision to abandon earlier predictions for a return to profitability. Ford CEO Alan Mulally said a dramatic shift in vehicle preference from trucks to cars accelerated when gasoline prices passed the $3.50 a gallon threshold.
It seemed to us that we reached a tipping point where customers began shifting away from these vehicles at an accelerated rate, Mulally told reporters on Thursday.
Fords revised plans now account for average U.S. gasoline prices to range from $3.75 to $4.25 a gallon throughout 2008 and in 2009.
Fred Rozell, a gasoline pricing expert for the Oil Price Information Service, said with so many possible variables that could impact prices through 2009, its difficult to say whether Ford will need to change those projections as well.
What we can guarantee is continued volatility in fuel markets, Rozell told Automotive News.
As of today, regular unleaded gasoline averaged $3.88 across the country, up 34 cents from a month ago. Midgrade went up 36 cents to $4.11 a gallon. Premium reached another record by averaging $4.26, up 38 cents from a month ago.
Diesel averages had the highest increase at 44 cents, reaching $4.65 a gallon, according to AAA, of Heathrow, Fla.
E85 was priced at $3.19, which is up 28 cents from last month. The adjusted price of E85, overall up 37 cents from last month, remained at last weeks price of $4.20 a gallon. The price of E85 is adjusted to reflect the fuels lower energy content compared with gasoline.
AAA's Daily Fuel Gauge Report provides national average fuel prices based on data from as many as 85,000 filling stations nationwide.
After passing the $135 a barrel mark Thursday, crude oil prices retreated to $130.51 in midday trading today. Many analysts see the weak dollars decline as one of the chief reasons oil prices have doubled in the past year, the Associated Press reported.
Drivers in Kailua Kona, Hawaii, are seeing the highest pump prices in the United States at $4.59 a gallon, a 20-cent increase from Chicagos nationwide high last week. Cottonwood, Ariz., has the lowest gasoline prices in the nation at $3.49 a gallon according to www.GasPriceWatch.com. The Web site relies on volunteers to report gasoline prices nationwide.