As prices rise, drivers scale back

Americans find alternate ways to get around

A bicyclist passes a gas station in Los Angeles as fuel costs rise above the $4 mark. With the price of gas above $3.50 a gallon in all but one state, there are signs that Americans are cutting back on driving, reversing a steady increase in demand for fuel as the economy improves. Other modes of mass transportation, such as bus transit, have been an option, while buying and driving more fuel-efficient vehicles also have become more popular.

NEW YORK -- Soaring gas prices are starting to take a toll on American drivers.

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.

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.

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. Only Wyoming has an average lower than $3.50.

Across the country, some drivers are checking out bus and train schedules, reconsidering mass transportation, or trading in their SUVs for more fuel-efficient models.

About 2 1/2 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," Ms. Shaw said.

Americans appear to be turning to smaller, more fuel-efficient cars. Sales of the Hyundai Sonata and Elantra soared 55 percent in March. Meanwhile, sales of Chevy's Suburban SUV dropped nearly 24 percent.

The decline is somewhat puzzling because Americans typically curb their driving only as a last resort, after sacrificing other forms of discretionary spending, such as shopping for clothes, or going to movies, concerts, and restaurants.

But demand for gas is falling while other spending is on the rise. Retail sales rose 2 percent in March compared with a year earlier.