Drivers on road despite expense
Toolbox
By JOE GUY COLLIER Detroit Free Press - Published: December 23, 2007
DETROIT — Gary Schuster does not like the trend for gas prices.
"They're at a disagreeable level," the 54-year-old Dearborn, Mich., resident said this week as he spent more than $40 to fill up his Ford Explorer Sport.
But gas prices have not risen enough to get him to change his driving habits or consider a smaller vehicle, said Schuster, who works on computer and pool equipment.
"I'll be going down back roads that don't get plowed all winter long," Schuster said. "I can put all my parts in the back of this thing and I can go anywhere."
With the holidays approaching, gas prices are on the rise again, hitting record levels for December. AAA Michigan reported this week that the price of regular self-serve gasoline in the United States is averaging $2.99, about 70 cents higher than at this time last year.
Gas prices could drop early next year, said Ben Brockwell, director of data, pricing and information services for Oil Price Information Service, a Rockville, Md., organization that tracks petroleum news and prices. Gas prices typically fall in the winter when consumers drive less and refineries run more smoothly, he said.
Most analysts, though, predict prices will rise again next year and could hit record highs in the summer, Brockwell said. Gas prices at or above $3 a gallon are here for a while, he said.
People keep using more gas, particularly in emerging economies, such as in China and India. Supply remains constrained by oil-producing nations and the lack of new refineries. And unrest in the Middle East has not gone away.
"Nothing fundamentally has changed or is changing quickly enough to force this market to go back down," Brockwell said.
Rising gas prices appear to be having little short-term impact on drivers. An estimated 65.2 million Americans, about the same number as last year, will travel 50 miles or more from home during the Christmas holidays, AAA reported this week.
Consumers are becoming more conscious of fuel-efficient vehicles. Almost 70 percent of U.S. adults say they're interested in alternative fuel vehicles, such as hybrids, according to a Yahoo Autos survey released this month that included 2,949 respondents.
Rising gas prices alone, though, will not likely shift buying trends, said Erich Merkle, director of forecasting for IRN in Grand Rapids, Mich.
Sales of trucks and traditional SUVs, such as the Ford Explorer and Chevy Trailblazer, could suffer next year, Merkle said.
When you ask people if they want better fuel efficiency, they usually say yes, Merkle said, but whether they'll give up space and comfort is another matter.
"Will you be willing to make tradeoffs for more fuel-efficient cars?" Merkle asked. "The answer is usually, 'No, I don't want to do that.'"
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