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American drivers reduce driving to avoid pain at the pump

ASSOCIATED PRESS
Gas station chains are seeing evidence that Americans are cutting back on gas purchases as prices rise. A board in Los Angeles showed fuel prices well over $4 yesterday.

NEW YORK » Soaring gas prices are starting to take a toll on American drivers.

Across the country, people are pumping less into the tank, reversing what had been a steady increase in demand. For five weeks in a row, they have bought less gas than they did a year ago.

Drivers bought about 2.4 million fewer gallons for the week of April 1, a 3.6 percent drop from last year, according to MasterCard SpendingPulse, which tracks the volume of gas sold at 140,000 service stations nationwide.

Before the decline, demand was increasing for two months. Some analysts had expected the trend to continue because the recovery was 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. Now it’s creeping toward $4 again.

People are still taking a hit, even as they conserve gas. That’s because gas prices are going up faster than people are cutting back. Gas is 32 percent more expensive than it was in April 2010. In all, Americans are paying roughly $340 million more per day to fill up than they did a year ago.

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. Gas is already 41 cents more expensive than 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. Gasoline is already above $4 per gallon in California, Hawaii and Alaska.

Across the country, some drivers are already hunting for cheaper gas, sometimes with the help of a mobile phone app. Others are reconsidering mass transit.

Americans also appear to be turning to smaller, more fuel-efficient cars. Sales of the Hyundai Sonata and Elantra soared 55 percent in March. Meanwhile, sales of Chevy’s Suburban SUV dropped nearly 24 percent.

The decline is somewhat puzzling because Americans typically curb their driving only as a last resort, after sacrificing other forms of discretionary spending, like shopping for new clothes or going to movies, concerts and restaurants.

But demand for gas is falling while other types of spending are on the rise. Retail sales rose 2 percent in March compared with a year earlier, surprising economists who were expecting no increase or even a decline.

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