Originally created 03/27/04

Pricey gasoline annoys, but doesn't deter drivers



When the price of gasoline surges, two things are practically guaranteed: Motorists will bemoan the rising cost and, more tellingly, they'll drive as much as ever.

"I hate it. I hate expensive gas," Don Macklin, 71, of Kingston, Ontario, said as he pulled his Chrysler minivan into the Travelodge motel just off Interstate 95 near Fredericksburg, Va., 400 miles away from a vacation with his wife in Myrtle Beach, S.C. "But what are you going to do? I just factor it in."

There is still a long way to go before hitting the price at which most drivers actually begin to conserve - either by purchasing more fuel-efficient vehicles or driving less, according to market research and historical data.

So despite Friday's record-setting price of $1.75 per gallon of regular-grade gasoline, experts said only a tiny percentage of drivers will actually cut back, and even then only marginally.

"As prices go up, people will grumble," said Dermot Gately, an economics professor at New York University who has studied the relationship between gasoline prices and demand. "But I don't think their behavior, at least in the short run, will be affected."

Gasoline demand this summer is expected to be at least as strong as it was last year, according to AAA. For the year, U.S. gasoline demand is expected to rise 1.6 percent to more than 9 million barrels a day.

That's not to say Americans indulge their appetite for fuel without some pain.

Holly Mistine, a 25-year-old model and professional belly dancer from Los Angeles, where prices average $2.14 per gallon, said travel expenses are cutting into her earnings.

Ms. Mistine bought an SUV last year to transport her props and costumes, but now that she has to fill up "at least twice a week," she wishes she'd gotten a smaller car.

Her predicament is no surprise to Ian Devers, the sales manager of Superior Toyota in Merriam, Kan.

"A very small percentage of the people out there actually make buying decisions based on what gas mileage is or what gas prices are," Mr. Devers said. "People do come in and talk about it, but most of it is just talk."

Industrywide statistics seem to bear that out. In 2003, sales of new cars declined by 5.8 percent, while sales of light trucks, which include pickups, minivans and SUVs, grew by 3.5 percent, according to AutoData Corp., of Woodcliff Lake, N.J.

An average price of the record $1.75 per gallon still does not provide enough sticker shock to significantly alter driving or car-buying habits, according to a recent survey by CNW Marketing Research, of Brandon, Ore.

If pump prices were sustained at $1.75 per gallon for six months, only 3 percent of motorists said they would drive "somewhat less" than they do today, according to a random telephone survey of 3,981 Americans. The figure rose to 9 percent at a hypothetical level of $2.75 per gallon.

The survey also found that gasoline would have to cost $2.75 per gallon for at least six months before even 5 percent of respondents said they would "immediately" purchase a more fuel-efficient vehicle.