Across the country, people are pumping less into the tank, reversing what had been a steady increase in demand for fuel. For five weeks in a row, they have bought less gas than they did a year ago.
Drivers bought about 2.4 million fewer gallons for the week of April 1, a 3.6 percent drop from last year, according to MasterCard SpendingPulse, which tracks the volume of gas sold at 140,000 service stations nationwide.
The last time Americans cut back so much was in December, when snowstorms forced people to stay home.
Before the decline, demand was increasing for two months. Some analysts had expected the trend to continue because the economic recovery was picking up, adding 216,000 jobs in March.
“More people are going to work,” said John Gamel, director of gasoline research for MasterCard. “That means more people are driving and they should be buying more gas.”
Instead, about 70 percent of the nation’s major gas-station chains say sales have fallen, according to a March survey by the Oil Price Information Service. More than half reported a drop of 3 percent or more — the sharpest since the summer of 2008, when gas soared past $4 a gallon. Now it’s creeping toward $4 again.
People are still taking a hit, even as they conserve gas. That’s because gas prices are going up faster than people are cutting back. Gas is 32 percent more expensive than it was in April 2010. In all, Americans are paying roughly $340 million more per day to fill up than they did a year ago.
Gas 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. Gas is already 41 cents more expensive than 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.
Across the country, some drivers are already hunting for cheaper gas, sometimes with the help of a mobile phone app. Others are checking out bus and train schedules, reconsidering mass transportation, or trading in their SUVs for more fuel-efficient models.
About 2½ days’ worth of Whitney Shaw’s pay each month goes just to fill up her 2001 Hyundai Accent. The administrative assistant is thinking about taking the bus for her daily commute, 50 miles each way between Branford, Conn., and Hartford.
“It’s three hours of pay from work just to fill up my tank even once, so I’m definitely feeling it,” Shaw said while filling up for $3.61 a gallon at a Valero station on the Berlin Turnpike.
But demand for gas is falling while other types of spending are on the rise. Retail sales rose 2 percent in March compared with a year earlier, surprising economists who were expecting no increase or even a decline.
Gamel said it’s 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 gas in October 2007, when the national average approached $3 per gallon.
Even if demand for gas keeps falling in the U.S., it probably won’t be enough to force the price down. That’s because worldwide demand for crude oil keeps rising.
Global demand for oil is about 87 million barrels per day, matching its peak from 2007. 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.