A summer spike in pump prices is hitting the point where it’s going to prompt motorists to change their behavior.
According to an AAA Consumer Pulse survey conducted in July, when gas hits $3.50 a gallon, about 23 percent of drivers’ start altering their habits. If it hits the $4-$4.50 per gallon range, another 38 percent will join in.
National, the average price of a gallon of regular-grade gas was $3.67 on Friday, up 34 cents from July 1. The rise was unexpected by many experts who were predicting a steady market at a much lower rate earlier this summer.
In the five-county metro Albany area, we’re faring a bit better. On Friday morning, the average cost of a gallon of gas was $3.475, 32 cents more than a month ago but still about 8 cents cheaper than a year ago. That’s better than the state average, which was at $3.566 on Friday, up just over 32 cents from a month ago and down just over a nickel from last year.
Back in April, the U.S. average hit $3.94 before it began declining.
Who’s to blame for the higher prices? Refinery and pipeline problems have contributed, but much of it has to do with the price of crude oil, which has risen from $78 a barrel in late June to $94, with increasing unrest in the oil-rich Middle East prompting much of that.
Commodity speculators look at the supply and demand for oil and try to guess what it will be in the future, which is driving the market prices for crude oil.
Motorists, however, tend to place more of the blame on oil companies (43 percent) and not enough domestic drilling (29 percent), according to the AAA survey. The Middle East situation (25 percent) barely nudged out oil cartels and commodity speculators (tied at 22 percent) and President Obama (21 percent).
Regardless of the cause, rising fuel prices are causing U.S. consumers to change their behaviors. AAA says the top three things consumers cut back on in direct reaction to higher pump prices are shopping for pleasure (47 percent), eating out (44 percent) and going out to lunch during the week (35 percent). None of that helps businesses, particularly restaurants, which are already having rough times, too.
Consumers also make their trips more economical by driving less overall (48 percent), consolidating their errands (44 percent), budgeting better (35 percent) and cutting back on discretionary spending (33 percent).
Barring a significant event such as violence breaking out in the Middle East or a hurricane hitting Gulf oil production, analysts believe prices won’t climb back to the heights we experienced in April before they start falling after Labor Day.
Meanwhile, many the behavior changes AAA noted make good sense in general, especially in the areas of conservation and smarter spending. Those would be good lessons to take from this.