Gas prices rise, demand begins to slip
Gas prices have risen above $3.50 a gallon in most of the US. With gas prices rising, Americans are cutting back on trips to the pump.
With gas prices above $3.50 a gallon in all but one state, there are signs that Americans are cutting back on driving, reversing a steady increase in demand for fuel as the economy improves.Skip to next paragraph
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For five consecutive weeks, Americans have bought less gas than they did a year earlier, according to MasterCard Spending Pulse, which tracks the volume of gas sold at 140,000 service stations nationwide.
For the week of April 1, drivers bought about 2.4 million fewer gallons than they did one year earlier, or 3.6 percent. That was the biggest decline since December, when people were staying home because of snowstorms.
Before the decline, demand was increasing for two months. Some analysts had expected the trend to continue because the economic recovery is picking up, adding 216,000 jobs in March.
"More people are going to work," said John Gamel, director of gasoline research for MasterCard. "That means more people are driving and they should be buying more gas."
Instead, about 70 percent of the nation's major gas-station chains say sales have fallen, according to a March survey by the Oil Price Information Service. More than half reported a drop of 3 percent or more — the sharpest since the summer of 2008, when gas soared past $4 a gallon.
This year, gas prices have shot up as unrest in North Africa and the Middle East rattled energy markets and increased global demand for crude oil squeezed supplies. A gallon of unleaded regular costs $3.77 on average, and only Wyoming has an average lower than $3.50. Gas is already 41 cents more expensive then at this point in 2008, when it peaked at $4.11 in July.
Most analysts are sticking to forecasts of a high of $4 a gallon, though some have predicted $5 gas.
Across the country, some drivers are already hunting for cheaper gas, sometimes with the help of a mobile phone app. Others are checking out bus and train schedules, reconsidering mass transportation, or trading in their SUV for a more fuel-efficient model.
Kim Cramer, who works for Radio Flyer in Chicago, has started walking and carpooling more. She's also learned to be choosy, buying gas in suburbs, where she's learned she can save as much as 20 cents a gallon.
"I try to fill up anywhere besides the city," she said.
About two and a half days' worth of Whitney Shaw's pay each month goes just to fill up her 2001 Hyundai Accent. The administrative assistant is thinking about taking the bus for her daily commute, 50 miles each way between Branford, Conn., and Hartford.
"It's three hours of pay from work just to fill up my tank even once, so I'm definitely feeling it," Shaw said while filling up for $3.61 a gallon at a Valero station on the Berlin Turnpike.