The pain of $4-a-gallon gas is spreading
This tipping point is already hitting the country's most populated areas. As gas prices surge, some consumers may cut spending in other areas.
A tipping point has hit some of the country's most populated areas: the $4 gallon of gas, which is digging into the pocketbooks of consumers in New York, California and Washington, D.C., according to the Automobile Association of America.
While painful for consumers, high gas prices may also spell trouble for the still-recovering economy. At $4 per gallon and higher, almost one-third of consumers say they're forced to make "significant cutbacks" in spending, according to a 2012 Gallup poll.
February's price jump has been unusual, given that drivers typically take to the roads less in winter, leading to lower demand for gas. But refinery shutdowns have resulted in tighter supply, which is driving up prices.
Unfortunately for consumers, it's likely that more parts of the country will soon feel the $4 pain, despite a break in the rising streak.
That's because fuel prices typically rise in March and April, as weather improves and drivers take to the road again. Peak prices this spring might approach the highs seen in 2011 and 2012, AAA noted in a Feb. 19 blog post.
The worst-hit cities are in California, with Santa Barbara residents paying the highest prices in the country: $4.36 for a gallon, according to GasBuddy.com. Other hard-hit towns include Honolulu, where a gallon costs $4.27, and New York City, where drivers pay $4.06.
The higher costs are taking their toll on consumers, according to the National Association of Convenience Stores (NACS), which represents the convenience and fuel retailing industry.
Almost one-quarter of consumers who buy gas are "very pessimistic" about the economy, up from 18% in January, when fuel prices started climbing, according to the NACS Consumer Fuels Survey.
"[C]onsumers are feeling the pain from higher gas prices and this is affecting their feelings about the economy in general," said John Eichberger, NACS vice president of government relations, in a statement. "Worse, consumers see no end in sight, with 62% saying that they expect prices to be even higher in the coming weeks."
It is unbelievable that oil companies continue to increase the price of gasoline while reporting year after year after year of record breaking profits in the billions, while at the same time receiving millions in subsidies and tax breaks from the US government.
I am all for free enterprise but it has come time for the President and Congress to act.
Stop the oil subsidies. Stop the oil tax breaks. Freeze gas prices, or regulate the way in which prices can be increased. Every time the economy begins to gain ground the hike in gas prices forces every aspect of growth to a grinding stop. I would say that gas prices have been the biggest hindrance to a sustained recovery for the last three years. Big oil needs to be contained!
That big gas guzzler isn't looking so appealing now is it?
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