Gas Guzzlers Choking at the Pump
Americans are finally cutting back on gas and making lifestyle changes.
— -- As the average price of gasoline creeps toward $4 a gallon, Americans are finally beginning to curb their use and change their guzzling habits.
The nation's gasoline consumption has fallen by an average 1.1 percent for the last six weeks, compared to the same period last year. It's the first sustained drop in demand in the last 16 years.
Crude oil futures hit an all-time record high Monday, climbing to nearly $104 a barrel overnight.
Analysts say gasoline has traditionally been the last place Americans have been willing to cut back, but with a sluggish economy and the average price at $3.16 a gallon, consumers are now using less and making lifestyle adjustments accordingly.
Denver-area resident Barbara Chelton now commutes by train instead of driving. She has also cut back on errands and traded in her sport utility vehicle for a more fuel-efficient model.
"When the gas prices went up two years ago, I knew I needed to make some sort of change," Chelton said.
Now when she gets gas, she does the math. "I keep track of how much I paid for it and then I calculate the mileage," she said. By taking the train she cut her gas intake by 75 percent. Less driving has also gotten her a $50 rebate on car insurance and the new fuel-efficient car saved her $15 to $20 a tank.
Chelton is part of a trend across America, where drivers are opting for the rails. In California, Amtrak is selling more seats. In Chicago, ridership on metro commuter trains is the highest in 24 years.
The changes are also reflected in February's auto sales, which showed a rapid slowdown in sales of traditional gas-guzzlers such as pickup trucks and SUVs.
U.S. sales of hybrid cars rose 39 percent last year. Sales for smaller 4- and 5-cylinder engines also increased.
Some analysts say if these lifestyle changes cause the demand for gasoline to dip, gas prices may also do the same.
"A lot of people have forecasted that we'll get to $4 dollar a gallon nationally. … If that is, in fact, the ultimate high for gasoline prices and people have cut back on their spending, you could get this relief situation where gasoline prices come back down and that sort of refreshes the economy," said Mike Santoli, an associate editor at Barron's.