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Rising Gas Prices Force Change in Driving Habits

Posted: Mar 10, 2008 10:20 a.m.

Reuters reports, "U.S. average retail gasoline prices have reached a new high of almost $3.20 per gallon and will likely jump another 20 to 30 cents in the next month, worsening the pain of consumers struggling to make ends meet in an economic downturn."  Nationwide, the average cost of a gallon of gas "has risen 64 cents per gallon in the past 12 months."  The San Francisco Bay area can claim the nation's highest average cost today, at $3.58 per gallon.  The cheapest gas is found in Cheyenne, Wyoming, where consumers pay an average of $2.95.

The rising cost is forcing a change in driving habits.   In a survey published by the Atlanta Journal-Constitution, 52% of readers say the cost of gas has caused them to limit their driving, while 11% have gone so far as to purchase a more fuel-efficient car.

Readers of Oregon's Portland Business Journal report the same phenomenon.  Fifty-four percent agreed that they were "more judicious about driving," with current prices, while 12 percent plan to "rely on other forms of transportation, such as the bus, light rail or...bicycle."

Washington's Everett Herald adds, "The prospect of sky-high gasoline prices is likely to prompt" many consumers to "change some driving habits."  A recent Nielson Co. survey "found 70 percent of U.S. consumers are combining around-town driving for errands and shopping, while 39 percent said they're just staying home more often. An estimated 65 percent of American car owners said they will 'dramatically change‘ their driving behavior if gas hits $4 a gallon, according to a study for the Automotive Aftermarket Industry Association."   

Connecticut's Day finds that many consumers are beginning to "shift their work to a home office or gear up for a job transfer closer to their residence. They invest in a global-positioning device. They talk their employer into a four-day week. Or they simply downsize from two cars to one."

Rick Newman of U.S. News & World Report says that the rising cost of gas will send consumers through several stages of remorse.  Already, he reports, "Drivers have made some adjustments, such as buying cars with smaller engines, driving a tad less, and downsizing their wheels a bit."  Next, he expects, drivers will begin "opting for the most efficient car over the family SUV for errands and short trips."  If prices over $4 a gallon persist, then consumers will cut other spending, since "for most drivers, it's easier to cut back on other goods than on gas, which they need to get to work and school and ferry their kids around."  Finally, he says, "Surveys do suggest that $4 gas could be a new threshold at which people will be willing to downsize or pay extra for a hybrid. But the financial crunch from costlier gas, combined with the current economic slowdown, could also lead some car owners to hold on to their cars longer."  As a result, he predicts, politicians would "end up taking the blame."