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Page added on June 11, 2008

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Fuel Prices Challenge Cars’ Reign

$4 Gas Transforms Buying Habits, Affecting Everything From Vacations to Pizza Orders


Gasoline prices, which shattered the $4-a-gallon mark on average in the Washington area Friday, ranged as high as $4.39 a gallon for regular yesterday amid signs that cash-strapped Americans are changing vacation plans, consolidating errands, and turning to carpools and mass transit.


…”The fear here is that we’ve crossed a Rubicon,” said John Townsend, a spokesman for AAA. “Normally, prices plateau after Memorial Day . . . But I don’t think we’re going to get much relief this summer.”


In a society nurtured on cheap gasoline, the high fuel prices are having disparate effects: the end of free pizza deliveries at major franchises, a plunge in the sales of sport-utility vehicles, a steep drop in the price of houses that are far from jobs or mass transit.


Federal officials have also reported the first decline in miles driven on U.S. roads since 1979, business at roadside convenience stores has slowed, and the tourism industry is bracing for a downturn this summer. Nationwide, about 8 percent of Americans say they have changed their commuting patterns and are taking public transportation, according to a survey conducted by NPD Group, a market research firm. The same share of respondents said they would vacation closer to home this summer because of rising gas prices.


The biggest U.S. airlines, squeezed by massive fuel costs, imposed domestic fare increases over the weekend, only to roll them back yesterday to avoid losing passengers.


After more than five years of petroleum price increases, American consumers appear to be expecting the worst. A CNN poll taken last week showed that 59 percent of Americans believe it is very likely that they will pay $5 a gallon for gasoline before the end of the year and that an additional 27 percent say it is somewhat likely.


Washington Post



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