SACRAMENTO, Calif. -- As the average price of gasoline zips toward $4 a gallon in California and past $3.50 nationwide, increasingly frustrated motorists are asking questions.
Among the most vexing: If we're using less gas, how come prices keep going up?
Since January 2010, California Board of Equalization statistics show year-over-year gas use statewide generally declining by 0.1 percent to 4 percent each month. National gas use has also been down or flat.
Some U.S. refineries have even begun exporting their fuel abroad.
Yet the average price of a gallon of gas in Sacramento is $3.93, the highest ever for the month of February, when prices are typically lower than they are at their summer peak.
Why? Well, for one thing, the United States remains an enormous consumer of gas, with demand for 300 million gallons a day, noted Patrick DeHaan, senior petroleum analyst for GasBuddy.com. And demand is still growing in many other countries.
"...Even if the decline was 7 percent (in the U.S.), it makes very little difference, given how much gas we use and the increased demand in nations like Brazil, China and India," he said. "Our drop in demand does not begin to offset the increased demand in those countries."
Demand from businesses and consumers isn't the only reason oil and gas prices are at historic highs for this time of year, analysts said. Pro-democracy movements across the Middle East last year prompted markets to speculate that supplies could be cut off. That speculation helped drive up the U.S. gas price from about $3 a gallon on Christmas Day 2010 to around $3.30 last Christmas.
Gas prices always begin rising as the weather warms and refineries start producing more warm-weather blends. This time, however, they're starting from a higher floor.
Also in the mix: Iran has threatened to withhold oil sales to Europe and block the Strait of Hormuz, the waterway through which 20 percent of the world's oil flows.
Whatever the cause, higher gas prices are worrying drivers in Sacramento and across the nation, and could cause them to cut spending in other areas, slowing the economic recovery.
At the Chevron station on Broadway in Sacramento on Tuesday, Sheldon Jones filled his minivan with $3.99 regular. "I don't know how I can keep paying these prices and still plan my family's budget," he said. "I know I'm just one of many in the same boat, but it's keeping me up at night."
Consumers have developed thicker skins since the last gas-price surge, in 2008.
Back in mid-July that year, AAA recorded the nation's highest average price of regular unleaded gas, $4.11 a gallon. That same month, California hit its all-time high of $4.61.
Bandon, Ore.-based CNW Research said that was a time when $3 a gallon for gasoline was the point at which consumers said they would drive significantly less and buy hybrid cars in huge numbers. However, CNW's latest national survey shows that $4.50 is "the new wall."
Even so, DeHaan said a sustained average national gas price of $4 a gallon "will have a significant impact on the economy ... and if we would have a $5 average for a month or two, which I think is unlikely, we're going back into recession."
Shawkat Hammoudeh, an economics professor with Drexel University in Philadelphia, has another measure: Crude oil hitting $120 a barrel "means about 0.5 percent will be cut from economic growth in the first year of a budding economic recovery."
Crude oil settled at about $106 a barrel on Tuesday, up almost $3 from the previous day.
Hammoudeh said the "typical American household spent $4,155, or 5.7 percent of its budget, on gasoline in 2011. If higher oil prices continue and the consumer is not able to adapt, a reduction in spending on non-discretionary goods and services will follow.
"If this scenario takes place, then the (U.S.) economy will suffer from a spending reduction that affects 70 percent of the economy," he said.
DeHaan and Hammoudeh agreed that gas prices could have a "significant" impact on this year's presidential race, but both said there is little that either political party can do to halt rising costs or quickly reverse them.
"Politicians are playing the gas price card, saying they're going to tame the market," DeHaan said. "What's the old adage? 'If it sounds too good to be true ... ' What are they going to do, get China to stop buying Iranian oil? That's not going to happen."
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