auctex cannot find kpsewhich

Hi all,

I have a small (probably trivial) question. I'm running lubuntu 11.10
with emacs 23.3.1. and auctex installed from the ubuntu repos.
However, I installed TeX by hand (e.g. from
http://www.tug.org/texlive/ and not from the ubuntu repos). Now when I
want to enter the macro "\usepackage" through "C-c Return" I get the
following message:

Searching for program: no such file or directory, kpsewhich

I assume that auctex is looking at the wrong place for kpsewhich.
kpsewhich is installed here:
/usr/local/texlive/2011/bin/i386-linux/kpsewhich and
/usr/local/texlive/2011/bin/i386-linux is in my PATH variable. (It's
being added to the PATH in my .bashrc file in my home folder.

Any ideas on how I can fix this?

Regards,
Laurent