Gas Prices Chugging Higher as Holidays Near

FILE - In this Oct. 19, 2009 file photo, Russ Conde, of Kingston, N.H., fills his truck with gas at...

FILE - In this Oct. 19, 2009 file photo, Russ Conde, of Kingston, N.H., fills his truck with gas at a fueling station, in Waltham, Mass. Americans are now paying more for gasoline than a year ago, and pump prices are expected to stay higher for several months as the nation heads into the holiday shopping season. (AP Photo/Steven Senne, file)

(AP)

Americans are paying more for gasoline than they did last year as the holidays approached — billions of dollars that could go to books, clothes and Barbie dolls instead being spent at the pump.

Gas averaged nearly $2.70 a gallon Friday, the highest of the year — adding bad news to an already fragile economy and making it even less likely that people will spend their way out of the recession.

From last November to January, the average price was $1.86. Even if prices average $2.50 per gallon during the same period this year, Americans will pay an extra $26.6 billion for gas, said Tom Kloza, chief oil analyst at Oil Price Information Service.

Americans didn't have much going for them financially in late 2008, but they did have this: Gas prices plunged by 93 cents per gallon between Oct. 30 and the end of the year. It was like a generous energy tax break, just in time for the holidays.

Thanks mostly to the weak dollar, that's no longer the case. And when a gallon of gas runs from $2.50 to $3, people begin to notice, energy experts say.

People make a "clear emotional connection" between the price of gas and how much they spend on other things, said Wendy Liebmann, who monitors shopping habits through her company WSL Strategic Retail.

"It nibbles out of our paycheck, and there's nothing we can do about it," Liebmann said. "We've got to get the kids to school. We've got to get to work if we're lucky enough to have a job."

As gas prices soared from 2006 to 2008, people became increasingly tightfisted, a survey by WSL found. When gas peaked above $4 a gallon in July 2008, more than two-thirds said they had cut back on other spending so they could still use their cars.

Prices today are a far cry from the peak. Crude oil, which neared $150 per barrel last year, is trading at about $80 now. But drivers are feeling the pain nonetheless.

Anything more than $3 a gallon "is high for me," said Rene Contreras, 24, as he filled his Chevrolet Monte Carlo at a Chevron gas station in Los Angeles that was charging $3.17 a gallon. Contreras added only a half tank before rumbling off.