Pump Pains

Published 12:00 am Thursday, May 17, 2007


For all their complaining as they pay $3 a gallon or more to fill up their cars, few American drivers have yet to reach the point of cutting back.

That&8217;s the message from government statistics showing that demand for gasoline is only just starting to level off even as refinery outages and tight supplies have sent pump prices soaring by 43 percent since the end of January.

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And brace yourself: experts say with gas already closing in on $4 a gallon in Chicago and San Francisco ahead of the peak summer driving season, higher prices could be in the cards.

Though prices haven&8217;t yet peaked in the area, locals too, say they feel the strain.

Hayes&8217;s not alone. Most Americans are locked into their driving habits, and can do little to alter their fuel-buying patterns when prices rise, experts say. For example, the number of workers with commutes lasting longer than 60 minutes grew by almost 50 percent between 1990 and 2000, according to Census Department data.

But that usually means they have to cut back elsewhere, as Wal-Mart Stores Inc. is finding to its distress. The world&8217;s largest retailer said Tuesday that earnings in the current quarter will fall short of Wall Street expectations, in part because of higher gas prices.

Weekly gasoline demand in April increased as much as 1.9 percent over to the same weeks in 2006 even as the average national price of a gallon of gasoline grew from $2.71 to $2.97 by the end of the month, according to Energy Information Administration data.

Only during the first week of May, when prices jumped to $3.05 a gallon, did demand for gasoline abate slightly &8212; by about two-one hundredths of a percent, EIA figures showed.

Experts disagree over how high prices have to rise before consumers are shocked into driving less &8212; at least temporarily.

Lars Perner, assistant professor of clinical marketing at the University of Southern California&8217;s business school, disagrees, saying the tipping point is more likely $4 a gallon.

There was a definite consumer reaction in September 2005 after Hurricane Katrina outages pushed prices above $3 gasoline for the first time. Demand dropped as much as 6.5 percent. &8220;There was … something significant psychologically about the $3 barrier,&8221; said Perner.

Since then, however, consumers seem to have adapted, with demand rising throughout a brief period of prices above $3 a gallon last summer.

Consumers may suspect that oil refiners are colluding in the recent price spike, but analysts say the real culprit is an unprecedented number of refinery accidents and maintenance outages this spring &8212; combined with drivers&8217; rising demand for fuel.

While higher gas prices haven&8217;t done much to cut demand, they also don&8217;t appear to have had much effect on consumers&8217; car-buying behavior, according to Autodata Corp. Sales of lights trucks and SUVs declined 3 percent in April, less than the 12 percent slump in car sales. Light trucks and SUVs continue to make up the majority of vehicle sales in the U.S., or about 53 percent.

Times sports editor Brandon Glover

contributed to this report.