Gas prices fall for 12th straight day

Retail fuel prices reach levels not seen since late May.

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By Kenneth Musante, CNNMoney.com staff writer

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NEW YORK (CNNMoney.com) -- The nationwide average for a gallon of regular gas has declined for the 12th straight day, a daily survey of filling station credit card swipes showed Tuesday.

Gasoline: The price of regular unleaded gasoline at the pump slipped 1.7 cents to $3.941 a gallon on average, falling to a level not seen since late May, according to a nationwide survey from motorist advocacy group AAA.

High fuel prices have strained American consumers and businesses, causing many to cut back on driving.

Average gasoline prices first crossed the $4 mark on June 7 when they hit $4.005 a gallon, according to AAA. Prices hit a record high of $4.114 on July 16.

But prices have since retreated, tracking a decline in oil prices. Crude prices have dropped amid worries that the high cost of fuel is slowing demand.

Ethanol: High fuel prices have caused many drivers, particularly those in states with strong agricultural industries, to switch to ethanol as their fuel of choice.

The price of E85, an 85% ethanol blend which burns cleaner than pure gasoline and is made primarily from corn, fell 2.1 cents to $3.201 a gallon on average, AAA reported.

While ethanol is derived from renewable sources, it is less efficient than gasoline. As a result, a car running on E85 would pay the equivalent of $4.212 per gallon to get the same mileage as gas, the AAA survey estimated.

Diesel: The average price of diesel fuel, which is used to power most trucks and commercial vehicles, fell to $4.724 a gallon from $4.736, according to AAA.

Diesel prices have gained more than 60% in the last year. And because of diesel is used to transport goods, the high prices have affected the prices of other items.

State prices: The AAA survey averages data from credit card swipes at 85,000 fuel stations around the country.

Gas in Alaska, the state with the highest prices, rose to $4.654 a gallon from $4.643 the previous day, according to AAA. Hawaii, the state with the second highest prices, saw average prices rise to $4.48. California prices dipped to $4.302 on average, the AAA survey said.

Drivers in Oklahoma, the state with the cheapest gas, saw prices fall to $3.67 from $3.686 a gallon the day before. In Minnesota, the next cheapest state for gas, drivers paid $3.70 on average, followed by Ohio at $3.713.

Drivers in Hawaii, the state with the most expensive diesel, saw diesel prices rise slightly to $5.377 a gallon. Diesel was cheapest in Oklahoma at $4.499, according to the AAA survey. To top of page

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