Gasoline 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 gas stations nationwide.
Before the decline, demand was increasing for two months. Some analysts had expected the trend to continue because [image-nocss] the economic recovery is picking up, adding 216,000 jobs in March. "More people are going to work," John Gamel, director of gasoline research for MasterCard, told the news agency. "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 (OPIS). More than half reported a drop of 3% or more--the sharpest since the summer of 2008, when gasoline soared past $4 a gallon.
This year, gasoline 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. Gasoline 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 gasoline, said the report.
Across the country, some drivers are already hunting for cheaper gasoline, sometimes with the help of a mobile phone app, AP said. Others are checking out bus and train schedules, reconsidering mass transportation or trading in their SUV for more fuel-efficient models, it added.
Americans appear to be turning to smaller, more fuel-efficient cars to save on gasoline, the report said. Sales of the Hyundai Sonata and Elantra rose 55% in March. Meanwhile, sales of Chevy's Suburban SUV dropped nearly 24%.
MasterCard's report shows drivers bought 2.7 billion gallons of gasoline last week, down 3.6% from the same period in 2010, when it was 80 cents cheaper.
The decline is somewhat puzzling, said AP, 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 gasoline is falling while other types of spending are on the rise. Retail sales rose 2% in March compared with a year earlier, surprising economists who were expecting no increase or even a decline.
Gamel said it is too early to tell whether this is the kind of long-term decline in demand that the economy endured during the recession. Prices already are in the range when Americans started to leave their cars in the driveway several years ago. Drivers began to cut back on gasoline in October 2007, when the national average approached $3 per gallon.
Even if demand for gasoline keeps falling in the United States, it probably will not be enough to force the price down, AP speculated. That is because worldwide demand for crude oil keeps rising.
Global demand for oil is about 87 million barrels per day, matching its peak from 2007, according to the news agency. It is expected to grow to more than 88 million barrels a day by year's end, with most of the increase coming from China. At the same time, supply is shrinking because of uprisings in Libya and elsewhere in the Middle East.
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