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Last Updated: Saturday, 9 April, 2005, 14:01 GMT 15:01 UK
US drivers fume as gas prices soar
By Matthew Davis
BBC News, Washington

Car drives past gas station price list
There may be little sympathy in Europe, but US drivers are feeling the pinch
There are increasing signs that US motorists are changing their driving habits in the face of record prices at the fuel pumps.

While the US love affair with the motor car is far from over, consumer dismay has greeted the latest predictions that the average price of petrol will hit $2.35-a-gallon during the peak summer driving season.

That is cheap fuel by European standards, but represents a substantial spike in the US, where motorists were paying some 40 cents less last summer.

Sales of gas-hungry sport utility vehicles and pick-ups are stalling, while drivers are taking drastic steps to cut down on expenses.

Brad Proctor, founder of Gaspricewatch.com reports a surge in price spotters for the site, which records prices at 128,000 gas stations to help consumers.

"We are a nation that drives a lot. When prices go up by 25 cents in 30 days, it hits business and consumers hard."

'Changes in driving'

The price spike is fuelled by the rising cost of crude oil, which makes up about half the cost of retail petrol in the US.

Daryl Smith - BBC pic
I am a cabbie who does 120 miles a day - I'm not taking long fares as I lose out on the return trip
Daryl Smith

"Taxi firms and pizza deliveries are now charging surcharges to cover gas costs," said Proctor.

"We are seeing changes in the way people are driving, what cars they are using. Families are leaving the big, gas-guzzling SUV at home and taking their second car for short trips."

Jay McIntosh, director of retail and consumer products at Ernst & Young, said "lower income earners" were most vulnerable.

"In the longer term I think we'll see some inflationary pricing at retail on many imported items like clothing and household goods," he told the BBC.

Highest gas price in the US is $2.99 per gallon, in San Francisco, California
Lowest is $1.96 in Evanston, Wyoming
UK drivers pay equivalent of $6.10 per gallon
Source: Gaspricewatch.com

A majority of Americans say gas prices are causing financial hardship, according to a recent CNN/USA Today poll of 1,040 adults.

Fifteen percent of respondents said the price of gas was causing them "serious hardship" jeopardising their standard of living, while 43% described "moderate hardship".

Forty-eight percent said gas prices had caused them to cut back on their driving.

But demand grows

Despite high prices, demand is expected to continue to rise due in part to the increasing number of drivers and vehicles on the roads.

The US Energy Information Administration says demand this summer will rise 1.8% from last summer, helping push pump prices to a peak average of $2.35 a gallon in May.

Lynn Franco, head of consumer research at The Conference Board, warned: "If we have several months of significantly higher prices then that is when we could see a marked impact in terms of consumer confidence."

For those on tight margins, the solution is to drive less.

Washington DC cabbie Daryl Smith said: "I'm not taking long fares as I lose out on the return trip.

"In fact, I'm not cruising for fares now - I'm parking in the good spots."

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