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High gas prices force sacrifices, such as travel and dining out


A driver in Belleville, NJ cut his cable and downsized his apartment to save money for gas. A retiree from Vallejo, Calif., Said he stopped driving to go fishing because the miles were too expensive for fuel. An auto repairman in Toms River, NJ, doesn’t go to restaurants as often. And an Uber Eats delivery boy said he couldn’t afford frequent visits to family and friends, some of whom live 60 miles away.

“Times are tough right now,” said Chris Gonzalez, 31, Uber Eats driver, as he refueled at a Safeway gas station off Interstate 80 in California.

Millions of American drivers have been keenly resenting the recent surge in gasoline prices, which last month hit their highest level since 2014. The national average for a gallon of gasoline is $ 3.41, or $ 1. $ 29 more than a year ago, according to AAA. Even after a recent drop in crude oil prices, gasoline remains 7 cents a gallon more than it was a month ago.

While consumers see a constant increase in the prices of many goods and services, the cost of gas is particularly visible. It’s displayed along highways across the country, including in areas where a gallon has climbed to $ 7.59.

Higher gasoline prices cause people to downgrade household budgets, sometimes foregoing leisure activities and in other cases cutting spending for the most part. Many are trying to save money by spending less time on the road, a difficult proposition as the holiday season approaches, and with it the temptation to make up for lost celebrations from last year. Only 32% of Americans plan to drive for Thanksgiving, up from 35% last year at the height of the pandemic, and 65% in 2019, according to a survey by fuel economy platform GasBuddy.

Consumers glimpsed the prospect of some relief this month as oil prices fell, reacting to the strengthening of the US dollar as well as concerns about looming Covid-19 lockdowns in Europe, and prices of the gas began to stabilize. While there is normally a delay between lower oil prices and cheaper gas, President Biden this week asked the Federal Trade Commission to investigate why prices at the pump have failed. not declined as much as one might expect, citing the possibility of “illegal conduct” by oil and gas companies. The administration is also facing calls from Congress to tap the country’s strategic reserve of oil, which Senate Majority Leader Chuck Schumer said would help struggling Americans.

Gas prices have increased in part due to fluctuations in supply and demand. Demand for oil dropped precipitously in the first few months of the pandemic, so the Organization of the Petroleum Exporting Countries and other petroleum-producing countries cut production. In the United States, the drop in demand led to a substantial drop in drilling; the number of oil platforms in the country fell by almost 70% in the summer of 2020.

But over the past year, demand for oil has recovered much faster than OPEC has restored production, and crude oil prices have doubled to $ 84 a barrel. (As of November 9, the price has dropped to just over $ 76.)

The shutdown of some major US refineries during the pandemic also squeezed oil supplies. Since the start of 2020, around 5% of the country’s refining capacity has closed, in response to a drop in travel.

“When demand picks up but you’ve eliminated a source of supply for good, the prices go up,” said Andy Lipow, president of Lipow Oil Associates, a Houston-based consulting firm. “The consumer feels pain at the pump.

For drivers, rising costs have added stress to commuting and weekly routines; suddenly, going out shopping or dropping the children off at school has taken on a new financial burden. Like supply chain disruptions and labor shortages, gas prices have also contributed to growing consumer sentiment that the economy is not fully functioning for them.

Aldo McCoy, owner of an auto repair shop in Toms River, saw gas pump numbers flash higher on Wednesday as he refueled his 1963 Chevrolet Impala. He remembers recently filling his Cadillac. Escalade 2003 and saw the price exceed $ 100, whereas it was previously $ 45.

Mr McCoy said he and his staff worked more than 15 extra hours each week to make up for the extra money they were spending on gasoline. He also cut down on his household expenses.

“You don’t go out to stores a lot, or to dinner,” he said. “You can’t travel for fun. It’s off the table now.

Louise Tomitz, 74, who is retired and lives on Social Security in Toms River, said the price of gasoline made it difficult to cover the costs of visiting her daughter who was nearly an hour’s drive to Middletown, NJ.

“I’m not working now, and then you have to pay all that extra money for gas and it affects my budget,” Ms. Tomitz said. “It’s getting hard.”

Drivers shocked by gas prices see more than the effects of crude oil costs. Meeting renewable fuels standards can increase by more than 10 cents a gallon, the price of ethanol has risen, and labor shortages in the trucking industry have made it more expensive to move fuel. gasoline from terminals to stations.

Energy analysts point out that gas prices have been higher in the past; in 2008, the national average exceeded $ 4.10 per gallon. (Adjusted for inflation, that would equate to $ 5.16 today.) They are optimistic that the increase in demand for travel and gas reflects the rebound in the economy after the pandemic. , although they fear that rising prices will cause people to cut back on other expenses.

“If gas prices rise so much that it affects the disposable income of consumers, it would weigh on discretionary spending,” said Fawad Razaqzada, market analyst at ThinkMarkets. “It would be bad news for retailers.”

In California, where the average price per gallon is the highest in the country, at over $ 4.60, drivers have said they are changing their behavior. Some have searched for cheaper places, like Costco and Safeway gas stations, to save a few bucks.

At an Arco station in San Francisco’s NoPa neighborhood, a line of cars spread out on the crowded street on Thursday. Some drivers have been looking for change. Others complained about the prices, which climbed to $ 4.49 at the Arco – known locally for its normally cheap rates – and up to $ 5.85 in the more expensive part of town. .

Keith Crawford, 57, who refueled his Kia Optima, said he made a habit of getting smaller amounts of gasoline twice a week to lessen the blow to his bank account.

“You have to spread it out to stay afloat,” said Mr. Crawford, a janitor. “It’s now part of the budget. “

Thirty miles northeast of San Francisco in Vallejo, drivers lined up at the Safeway gas station near I-80, where the price was $ 4.83 per gallon. Several have charged their bills to the Biden administration.

“This is Biden, Gavin Newsom – look at the gasoline taxes we pay,” said Kevin Altman, 54, referring to the governor of California.

Mr. Altman paid $ 50 to refuel his jeep and estimated that gasoline would only last him two days. He said he had stopped driving to go fishing in the nearby town of Benicia to avoid using too much gas and would be doing all of his Christmas shopping online this year.

The cost can be particularly difficult for people who own businesses that depend on public transit. Mahmut Sonmez, 33, who runs a car service, spends nearly $ 800 on gas out of the $ 2,500 he earns each week driving people in New Jersey. To save money, he moved in September to an apartment in Belleville $ 400 cheaper than his old house. It also cut its cable service and changed its mobile phone plan.

If gas prices continue to rise, Sonmez said, he will consider changing jobs after nine years in the industry. “Somehow we have to pay the rent,” he said.

In New Jersey, which bans self-serve gasoline, some drivers are directing their anger at station officers.

“Every day they curse me,” said Gaby Marmol, 25, deputy manager of a BP station in Newark, adding that when she sees how much customers are spending on gasoline and convenience items – 1.19 $ for ringtones that was 50 cents – she feels sympathetic. “We’re just doing our job, but they think we’re setting the prices. “

Cheik Diakite, 62, an attendant at a Mobil station in Newark, is not receiving as many tips as before the pandemic, he said, and becomes frustrated while listening to customers attribute the high prices to Mr Biden.

Mr. Diakite generally spends his afternoons looking for his most loyal customers. Bebi Amzad, who works in a nearby school, always has the same request for him: “Refuel”. But when she pulled up on Thursday, she asked him to give her only $ 30 worth of gasoline.

“Today I’m not refueling because I have other expenses,” said Ms. Amzad, 54, who is traveling to Newark from Linden, NJ. “Everyone’s in pain.”

Because she spends so much on gas and groceries, Ms. Amzad continued, she can’t afford many indulgences. “I don’t go to Marshalls anymore.”

Clifford krauss contributed reports.


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