Fuels

The $4 Club

Gas prices above $4 a gallon in six states, D.C.; others getting closer
WASHINGTON -- Add New York to the growing list of states where gasoline prices are topping $4 per gallon, said the Associated Press. On Sunday, the Empire State became the sixth state to top $4 for the average price of a gallon of gasoline, joining Alaska, California, Connecticut, Hawaii and Illinois, according to AAA's Daily Fuel Gauge.

The average price of gasoline also rose to more than $4 per gallon in Washington, D.C., on Saturday.

The next states to join the list could be Michigan, which has gasoline for $3.95 per gallon on average, and Indiana, where the average [image-nocss] price is $3.94. Nevada, Washington and Wisconsin are close behind.

Hawaii has the highest price in the United States at $4.48 per gallon. Wyoming has the lowest, at $3.54.

The national average for gasoline has increased for 26 straight days, and is now at $3.83 per gallon. That's up 29 cents from a month ago. Retail surveys suggest motorists are reacting to higher prices now by buying less fuel. Still, the government expects pump prices to keep climbing this summer as vacationers take to the highways, said the report.

Separately, according to The NPD Group's Motor Fuels Index, which continually tracks consumer motor fuel purchasing behaviors and attitudes, gallons purchased are down 1.2% from a year ago. In addition, a consumer survey conducted by NPD in January to gauge what price level would be required to cause consumers to drive less suggests that at today's gasoline prices approximately 60% of consumers are cutting back on driving now.

"If the current uptick in gas price is sustained, we can expect consumers to begin implementing some key changes like reducing or consolidating shopping trips, taking more mass transit and carpooling," said David Portalatin, industry analyst for NPD's automotive aftermarket business. "In the case of a prolonged spike above $4, we'd expect even more significant changes like working from home, relocating or changing jobs, or driving a more fuel-efficient vehicle."

Based on recent history in 2008 when gas reached a high of $4.16-a-gallon, NPD research shows that drivers made significant changes in driving behavior including 49% who reduced or consolidated shopping trips, 29% cancelled or modified vacations and 25% found alternate means of transportation including mass transit, carpooling and riding a bike. These are the very changes consumers are likely implementing once again.

"It comes down to the simple economics of share of wallet," Portalatin said. "Most consumers have limitations in their budgets. If they are spending more on gas, they either need to cut down on their driving or spend less on other things. History has told us they begin by cutting down on their driving."

For American drivers, the $4 mark harkens back to the summer of 2008, said AP, when oil rose to $147 per barrel and gasoline prices topped out at $4.11 per gallon before the economy went into a tailspin.

The rapid increase at the pump follows a parallel rise in oil. Since Labor Day, oil has risen 48% and U.S. gasoline prices have gone up 42%. The increases gained momentum in mid-February when a popular rebellion in Libya turned violent and shut down the country's exports. Crude has jumped 30% since then, with gasoline prices gaining 22%.

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