Drivers cutting back as fuel prices climb

NEW YORK — With the price of gasoline 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.

For five consecutive weeks, Americans have bought less gasoline than they did a year earlier, according to MasterCard Spending Pulse, which tracks the volume of gasoline sold at 140,000 service stations nationwide.

For the week of April 1, drivers bought about 2.4 million fewer gallons than they did one year earlier, or 3.6 percent. That was the biggest decline since December, when people were staying home because of snowstorms.

Before the decline, demand was increasing for two months. Some analysts had expected the trend to continue because the economic recovery is 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 gasoline-station chains say sales have fallen, according to an Oil Price Information Service survey. More than half reported a drop of 3 percent or more — the sharpest since the summer of 2008, when gasoline soared past $4 a gallon.

At least one local gasoline retailer said he believes the fuel-consumption dip in Southern Nevada hasn’t been as bad as it’s been nationwide, only because locals began conserving on all expenses when the recession deepened in 2008.

“Since the bubble burst three years ago, everyone made big-time adjustments in their personal habits and how they live their lives,” said Jeff Marshall, owner of the Trop Stop Gas & Car Wash, a convenience store and gasoline station at Tropicana Avenue and Decatur Boulevard. “Fuel usage is probably fairly constant because people have to go to work, they have to go home, they have to pick up their kids and they have to go to the pharmacy.”

At the Trop Stop, sales have actually skyrocketed in 2011: The store expanded from eight pumps to 32 pumps in January.

Though Marshall’s business isn’t feeling the fallout from higher gasoline prices, he said the pricier fuel is a tough burden for many locals to bear.

“It’s certainly placing a strain on quite a few people who are having trouble making it month to month right now as it is,” Marshall said. “People in this community still are very unsure of how much longer they’ll be able to keep their jobs and hold their incomes. I’m concerned about that for the citizens in our community and our nation. I don’t think we’re out of the woods by any stretch.”

This year, gasoline 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, and only Wyoming has an average lower than $3.50. Gasoline is already 41 cents more expensive then at this point in 2008, when it peaked at $4.11 in July.

Most analysts are sticking to forecasts of a high of $4 a gallon, though some have predicted $5 gasoline.

Review-Journal writer Jennifer Robison contributed to this report.

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