American Outrage: Ridiculously High Gas

June 9, 2008— -- Anger. Frustration. Shock. Maybe even a few tears.

That is the scene from coast to coast as Americans shell out more and more money to fill up their cars with gas.

The average price of a gallon of regular unleaded gas now stands at a record $4.04, the Department of Energy announced this afternoon.

That's up more than 40 cents since the start of May and nearly a dollar since this time last year.

America's love affair with the car has never cost more. For many families already struggling with their mortgages and high food prices, this spring's quick run-up in prices is a nasty shock that adds insult to injury.

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For more than two decades Americans have enjoyed -- and prospered from -- cheap gasoline. That is no longer the case.

"When you're used to having something and then it's taken away, it's hard not to complain," said Gina Pierce, who lives in northern Minnesota.

Asked to describe the impact of gas prices, Pierce just said: "Tragic."

"I don't know how else to put it in a nicer way," she said. "I almost feel like the oil companies are being greedy more than anything else."

Pierce's family now spends $660 a month on gas, up from $360 just six months ago. Her husband drives 40 miles each way to his job as foreman of a lumber yard. They considered replacing his GMC Jimmy with a more fuel-efficient car but could not afford to do so.

To pay for gas, the family has canceled their children's health insurance and stopped making payments on their credit cards.

"It has hurt us tremendously," Pierce said. "It seems when the country as a whole is hurting, something should be done about it."

Gas price increases are particularly exasperating because they are so well-known. What other product advertises its cost with big billboards at every street corner?

When those signs first started flashing $3 a gallon back in May 2007 there was outrage, but then the summer driving season wound down and prices receded -- just a bit. But then in November, gas crossed the $3 threshold again and has not dropped below it since.

Now those gas station signs are advertising prices of more than $4 a gallon and you can just hear the groans of passing motorists.

"I just don't know where that extra money is going that makes gas prices so high," said Kristi Leak, who lives outside Raleigh, N.C. Summing up the feelings of so many Americans, she said: "These gas prices have really got me frustrated."

Leak is a teacher with two small children, who now walks everywhere, pushing her double stroller. But there is only so much she can do in the neighborhood and she said she would like to "at least drive a place or two to entertain my children this summer."

"I'm really annoyed," she said.

Some have responded to high gas prices by starting to walk, bike or carpool to work. Long-ignored mass transit systems are seeing an unprecedented surge in riders.

But not all Americans have such options. Hurt most by the rising prices are Americans who live in rural areas. They often have no other choice but to drive and usually have to cover large distances to get to work or the grocery store.

But American isn't alone in its gas-price struggles.

Prices have gotten so bad that truckers throughout Europe-- who are paying about twice what we pay at the pump here thanks to government taxes -- have held mass protests.

The latest demonstration came earlier today when Spanish truckers blocked their country's border with France in protest over high diesel costs. Similar protests have occurred in Portugal, Belgium and France.

There is no easy explanation for why gas prices got so high so fast.

The price of gasoline is being driven up by high oil prices, which are rising because of growing worldwide demand for oil. Even as demand begins to decrease in the United States and other Western countries, demand continues to grow in developing nations like China and India.

But that didn't happen overnight and is only part of the story.

Many investors spooked by the subprime housing market and other problems with the financial sectors have fled from the stock market. Instead of investing in stocks or bonds, these investors have chosen to place their money in oil, driving up the price.

Further compounding the problem is that oil is priced in U.S. dollars. As the dollar weakens against foreign currencies, the price of oil goes up for American consumers.

Shannon Schraufnagel, who lives in rural northern Idaho, is not going broke because of high gas prices but has already cut some summer trips short.

"What I am worried about is the fact that since the gas prices are 'bearable,' how much worse are they going to let it get?" Schraufnagel said via email. "When will be the breaking point be for all Americans, not just the lower class? I feel like the people who are in control of all this are just going to keep pushing and squeezing until we snap."

Like many others, Schraufnagel is looking to leaders in Washington for a solution.

"What is going to happen when we get a new president on board, no matter who they are?" she said. "How is this situation going to be handled? I feel like things are brewing for a head-on collision in our country and the rest of the world."

Schraufnagel now pays $50 every week or so to fill up her 1995 Grand Am.

"I remember when I started paying about $30 for a tank of gas and thought that was bad," she said.

Schraufnagel blames OPEC counties, particularly those in the Middle East, saying that demand can only have shot up so much in recent months.

"We have all our men and women in Iraq fighting against terrorism." she said, "while we here in America supply the enemy with our hard-earned money."