With the price of gas 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. Gas sales have fallen for five straight weeks, the first time that has happened since November, according to MasterCard SpendingPulse, which tracks spending at 140,000 service stations nationwide. Before the decline, demand increased for two months; some analysts had expected the trend to continue because the economic recovery is picking up. “More people are going to work,” says John Gamel, director of gasoline research for MasterCard. “That means more people are driving and they should be buying more gas.”
Instead, about 70% 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% 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. In Baton Rouge, the average price for a gallon of regular unleaded is $3.64, according to AAA’s Daily Fuel Gauge Report, a 20-cent increase over where it was a month ago. Gas is already 41 cents more expensive than at this point in 2008, when it peaked at $4.11 in July.
Today’s poll: At what price will gas purchased locally peak this summer?