This article is only two weeks old and already gas is well north of $4 here in Seattle. What is it doing in Tampa?
Teeth Gritted, Drivers Adjust to $4 Gasoline
Hating every minute of it, Americans are slowly learning to live with high gasoline prices. For a nation accustomed to cheap fuel, big vehicles and sprawling suburbs, the adjustments are wrenching.
Many Americans are beginning to change their lives in order to cope with rising gas costs. Cory Asmus of Temecula, Calif., bought a motorcycle to commute to work. His gasoline bill has dropped to $8 a week, from $110. Cory Asmus of Temecula, Calif., just bought a $4,800 motorcycle for his 20-mile drive to work so he could cut his gas bill to $8 a week, from $110.
Florian Bialas, a retiree who lives near Chicago, sold his 1997 Pontiac Sunfire for $3,000 and plans to give up his license when it expires in September. “I can walk to most places where I need to go,” he said.
And Debbie Gloyd of Cleveland has parked her Chrysler Concorde and started taking the bus to work. “I can’t afford these gas prices,” she said. “They’re insane.”
With the nationwide average price for regular gasoline closing rapidly on $4 a gallon, people are bracing for a summer of expensive driving.
As the Memorial Day holiday starts the summer driving season, record prices are provoking dread and upsetting vacation plans. A recent survey by AAA, the automobile club, found a rare year-on-year decline, of 1 percent, in the number of people planning to travel this summer.
Interviews with more than 70 people across the country suggested that the adjustments they were making, mental and otherwise, would last well beyond the summer. Americans have started trading their gas guzzlers for smaller cars, making fewer trips to the mall and, wherever possible, riding public transportation to work.
For years, it was not clear whether rising prices would ever cause Americans to use less gas. But a combination of record prices, the slowing economy and a tight credit market has beaten consumers down.
Gasoline demand has fallen sharply since the beginning of the year and is headed for the first annual drop in 17 years, according to government estimates.
The Transportation Department reported Friday that in March, Americans drove 11 billion fewer miles than in March 2007, a decline of 4.3 percent. It is the first time since 1979 that traffic has dropped from one March to the next, and the month-on-month percentage decline is the largest since record keeping began in 1942.
High gasoline prices, plastered on 20-foot signs from coast to coast, are turning into a barometer of the country’s mood.
“The psychology has changed,” said Sara Johnson, an economist at Global Insight. “People have recognized that prices are not going down and are adapting to higher energy costs. It’s a capitulation.”
Typically, gasoline sales rise before Memorial Day weekend. But gasoline sales dropped nearly 7 percent last week compared with the same week in 2007, according to an estimate by MasterCard.
Gasoline prices almost always rise in the summer, as demand increases. On Friday, gasoline prices reached yet another record, a nationwide average of nearly $3.88 a gallon. That figure was up 4 cents in one day and is 65 cents higher than this time last year, according to AAA. Diesel hit $4.65 a gallon on Friday, up $1.73 a gallon in a year.
The force behind high gasoline prices is the high price of oil, which is being driven up by soaring worldwide demand. Oil reached a record above $133 a barrel this week, nearly five times as expensive as it was five years ago.
All this has led to a vast transfer of wealth from American drivers to domestic and foreign oil producers. Every one-cent increase in gasoline prices means Americans pay $1.42 billion more a year for gas, according to Stephen P. Brown, an economist at the Federal Reserve Bank of Dallas. Nearly two-thirds of that goes to foreign producers.
In the first four months of the year, Americans spent $158 billion on gasoline. In 2003, just as oil prices started to take off, they spent $88 billion over the same four-month period, according to Michael McNamara, vice president for MasterCard’s Spending Pulse, an indicator of weekly gasoline sales.
Whether today’s high costs will translate into a permanent change in behavior remains to be seen, of course. The Energy Department expects gasoline sales to fall by 0.6 percent this year, the first drop since 1991, but it expects consumption to rebound in 2009 as the economy strengthens.
Still, analysts said that the hardship induced by today’s prices is getting close to the level reached during the oil shock of the early 1980s.
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nytimes.com |
