Subscriber Benefit
As a subscriber you can listen to articles at work, in the car, or while you work out. Subscribe NowSonny Alaniz was headed home after midnight when his ATV lurched to a stop on a rural Texas road, the gas tank undeniably drained.
The nursing student and his seven passengers, who had been out celebrating his 22nd birthday that last Saturday in May, had little choice but to hop out and push. They slogged three miles before someone arrived with fuel, only to find the four-wheeler still wouldn’t start and had to be towed. “Next time, I’ll just stay home,” he joked.
It’s a familiar predicament, especially as the incessant run-up in prices has motorists testing the limits of their fuel gauges: AAA fielded 50,787 out-of-gas calls in April, a 32% jump from the same month last year. More than 200,000 drivers have been similarly stranded this year, the automobile club said. And gas prices have risen precipitously since April, making the financial pain even more acute.
Fuel prices began their most recent surge after Russia invaded Ukraine in February, upsetting energy markets. The U.S. average for a gallon of gas has swelled 62%, to $4.96, since last year, AAA data shows. Motorists in 16 states are paying at least $5 a gallon on average, while California has breached $6. Filling up a tank of gas, depending on the vehicle, can cost more than $100, which is the equivalent of 14 hours of after-tax income for certain low-wage workers.
In Indiana, the average gas price hit a record high Wednesday of nearly $5.25 per gallon, according to GasBuddy, up about 34 cents in the past week, more than a dollar higher than last month and up about $2.20 over the past year.
The escalating expense, combined with the rising costs of food, housing and other essentials, has consumers playing inflationary whack-a-mole, making tougher choices on how much they can spend and when. Some drivers may do a partial fill-up if they’re pressed for cash at the end of a pay cycle, says Patrick De Haan, head of petroleum analysis at GasBuddy.
“If you only have five or 10 bucks left before your next paycheck, that’s what you’re going on,” De Haan said. “This tells us people are really hurting from high gas prices.”
A Washington Post-Schar School poll bears that out: 44% of drivers randomly contacted between April 21 and May 12 said they have only partially filled their car’s gas tank, a figure that rises to 61% for drivers with incomes below $50,000.
And more than 6 in 10 drivers have made the decision to drive less—making fewer trips to the grocery store, for example—while more than 3 in 10 said they are driving at reduced speeds, which can improve gas mileage.
Gasoline demand, measured as a four-week moving average, dropped to 8.8 million barrels a day for the week ended May 20, according to the U.S. Energy Information Administration. If you exclude 2020, that’s the lowest level for that time of year since 2013.
Alina Hille, 35, is used to cutting it close between fill-ups but had never actually run out until a recent Monday afternoon, sidelined on a St. Louis street with her son, 4, and daughter, 7, in tow. The three trudged to the nearest fuel station, where the loaner gas can was out with another customer. So Hille, who works as a therapist for a nonprofit, purchased a one-gallon canister for $1.50, filled it up and managed to get home in time to jump on a Zoom call.
She has found ways to pare back—she works from home more often and is more likely to walk her kids to school—but the financial challenge is profound: As of Wednesday, a full tank of gas would run her $67―$9 more than a month ago.
“I find myself not doing things I used to with the kids because of the gas prices,” Hille said. “We used to go for drives when they are restless or try to drive to playgrounds, or destinations they haven’t been to before.”
Now, she says, “I’d rather buy groceries.”
Back in South Texas, Alaniz said fuel prices have forced changes in his commute and college plans. He used to make the roughly 60-mile drive from his family’s ranch near Alice to Corpus Christi, where he attends college, in his Chevy Silverado 2500, a large pickup that he estimates squeaks out 14 mpg on the highway
Even with a part-time job, the charges have become unbearable. “You’re talking about $60 gives me half a tank,” he said.
So he’s trading in his Chevy for a smaller truck that gets better mileage. He’s also switching to online classes for the upcoming semester.
Such wholesale lifestyle changes illustrate a tipping point: Studies have shown that consumers don’t adjust their fuel spending much in response to short-term price changes, at least not in comparison with other everyday purchases. Rather, it usually takes sustained increases to affect behavior, said Roger Ware, an economist with Queen’s University in Ontario.
“People will maintain their driving habits in the short term because they do not see an alternative to meeting their goals, whether for commuting or recreational driving. Over a period of months or years, however, many things will change if prices stay high,” Ware said.
If prices remain elevated, he said, more commuters will switch to public transit or carpooling. Consumers also will be more prone to rethink their vehicles and trade them in for more fuel-efficient options. And some people will move closer to work to lighten commutes, or do more of their work remotely.
Price hikes, coupled with more Americans resuming their pre-pandemic driving habits, could be contributing to the spike in out-of-gas calls, according to AAA repair systems manager David Bennett.
Only about 2% of AAA’s total roadside assistance calls each month are fuel-related, a proportion that is roughly equivalent to before the pandemic. In March 2019, when fuel was cheap and more vehicles were on the road, there were 53,800 fuel-related assistance calls.
“People have been stuck at home for the past couple years,” Bennett said. “They’re looking for opportunities to go and explore.”
For Danielle Socha, who makes food deliveries for three apps in the San Diego area, a tank of gas runs about $83. She’s run out so many times it’s become a running joke with her friends and family.
“My gas gauge is broken,” she said. “I don’t get a read on my car and this keeps happening.”
She keeps an empty container in her car so she can walk to a gas station if necessary. Socha says she occasionally gets dirty looks from passersby, but she’s also benefited from acts of kindness. In the most recent incident, a young man helped push her 2013 Volkswagen Jetta off the road when he saw her waving a white rain jacket in the air.
The price hikes also have given rise to bizarre instances of fuel theft. A San Diego couple called police after they found a hole drilled in the bottom of a car, emitting a steady stream of gas, according a March 21 report from CBS8. Similar incidents have been reported in Memphis, Las Vegas and other cities.
Three Florida men were arrested and face racketeering charges on accusations of stealing thousands of gallons of diesel directly from gas stations, transporting it in 300-gallon “gasoline bladders” and reselling it, according to Newsweek.
Please enable JavaScript to view this content.
Joementia did that. It’s going to $10/gallon. And, guess what, the White House wants it that way. It’s the price you pay for green energy and the war on fossil fuel. Biden could end this nonsense with the stroke of a pen anytime he wants. He’s been clear he has no interest in consumer of gasoline, natural gas, or coal. It’s all about the Green New Deal and the Far Left.
Elections have consequences. Enjoy.
Fossil fuel should have been a thing of the past a long time ago. Should get it up to $20/gallon if we can. Buy a hybrid and invest in renewables like we should have been doing this whole time.
Electric cars are, in most of the country, coal-powered vehicles, Bryan. They create the illusion of green energy but merely push the fossil fuel consumption elsewhere down the supply chain. But if it makes you feel morally superior, far be it from me to stop you.
+1 Ryan
And exactly correct Lauren B.
Electricity for those electric cars is from coal. I guess the left think our homes receive magic green energy from AES/IPL, et. al.
Correct! The fossil fuel industry is under attack from several
directions that disincentivise entry into the fossil fuel industry.
Called barriers to entry.
Bryan T. — That is an insane strategy.
The fossil fuel industry helped us become the most productive
and modern society that the world has ever known.
Second, solar and wind will not cut it. We need fossil fuels.
If you want to live a cave man existence, then great have at it.
Most of us don’t.
Apparently some people missed the news that Cummins is developing new big-rig truck fusion-powered engines. Bottom line: zero carbon emissions. And these are just several years from hitting the market. The days of fossil fuels are numbered.
Hate to break it to you but Ole Joe didn’t do anything. Not one President has any “control” of fuel pricing. It’s controlled by supply/demand and a handful of greedy middle eastern billionaires.
Why do think there is no supply? Check out Biden’s first day of executive orders. The US was energy independent the day Biden walked in the White House. We were the largest producer of oil in the world. We didn’t care about the Middle East for our well-being, and we certainly didn’t have to pander to them, Venezuela, or even Iran.
It’s a dangerous game the White House is playing with our energy. And the American people are going to be left holding the bag.
Re-read Lauren B’s and Ryan H’s posts, Jaron. You are being played by whatever publications you read, blogs you follow, or news programs you watch who put forth the nonsense you espouse.
A simple pen by Biden removed our energy independence.
Career politicians doing career power move things all at the expense of the constituents wallets.
Normally I would agree that it is a supply & demand issue.
However, you have the Dems interfering in the market by regulating winners
and losers and creating barriers to entry that effects the supply.
This a business journal isn’t it???
Spot on Jaron. Be very wary of people who have simple explanations for complex market conditions. Apparently they only dive into shallow waters.
From NPR: Oil prices have risen sharply over the last few months. Normally, that’s a recipe for a drilling frenzy from U.S. oil producers. But something strange is happening, or rather, not happening. U.S. producers are actually being restrained at the moment,” says Helima Croft, global head of commodities strategy at RBC Capital Markets. “They are trying to be disciplined.” Oil companies are under a lot of pressure to keep their production down. And the call is coming from inside the house: it’s oil investors who are pushing for companies to pump less oil.”
True, gas prices are historically high in the U.S., but they are much higher in most other countries because the U.S. heavily subsidizes oil production (and those who invest in it). True, Biden would like to see us transition to a cleaner energy future (our children will thank us). But if you really want Biden to do something about gas prices so you can drive your 20-mpg trucks and SUVs there would be no more effective action than to nationalize the industry to remove the profit motive from the equation (something a Republican,. Teddy Roosevelt, threatened to do to the coal industry to end a strike). If we had taken climate change and environmental degradation seriously 30 years ago the price of oil wouldn’t matter in 2022. As for production, the U.S. is still by far the largest oil producer in the world and has far more pipelines and miles of pipelines than any other country. Biden hasn’t changed that. So maybe it’s all a little more complicated than most people are willing to consider.
We do NOT subsidize the oil industry. That’s a Leftwing myth.
You should be asking yourself why isn’t competition entering the
markets with all the money that can be made producing oil.
The Dems and their leftwing voters have been attacking the fossil fuel
industry on several fronts. So why invest in an industry that the leftist
Dem government is trying to destroy.
Keith…. Do you not understand that there is no way for competition to enter the oil market?
It’s a closed loop system. You can just demand someone sell you oil fields and then subvert the 5-10 year process of staring to find/drill/refine/ship oil….
It’s all driven by corporate earnings – not by some invisible government hand telling them not to drill more
Also – the IMF is not a liberal mouthpiece…
https://www.imf.org/en/Publications/WP/Issues/2021/09/23/Still-Not-Getting-Energy-Prices-Right-A-Global-and-Country-Update-of-Fossil-Fuel-Subsidies-466004
Glen F. – Well said! And nice job of triggering the simpletons too…
I think Biden is good for the working class ,but he did go to far with this total electric thing.We should be moving into hybrids for years to come first.As far as the price of oil goes, remember when the price of oil was in the negative?Frack baby Frack didn’t make the shareholders happy with all that cheap oil.So What oil companies that were left capped those wells and are letting the prices rise without those costly investments and in turn giving back to the share holders,I know I invest in those companies!