Philadelphia-area drivers pay noticeably less at pump
"I've been considering a job in North Jersey, so if prices continue to drop, then I will go," said the 37-year-old resident of Woodbury, Gloucester County, yesterday after paying $3.15 a gallon at a station in Woodbury Heights.
While many consumers will probably react just as Cream did to lower gasoline prices and at least consider driving more, the experience this summer of $4 gasoline seems to have fundamentally changed the attitude of many others.
Still, what ultimately happens with fuel prices depends on an opaque web of market forces driven by the psychology of drivers in this country and the insatiable demand for oil in China, India and other nations trying to catch up to the convenience of American car culture.
For decades, gasoline prices in the United States were so low that drivers gave little thought to the fuel they grew so attached to.
"We've been largely unconscious about our consumption of gas," said Kit Yarrow, a consumer psychologist at Golden Gate University in San Francisco. "But that is changing. I think people are really aware now that when we put the pedal to metal that is costing them money."
A tank of gasoline can easily top $75 for many drivers, though it is costing them a bit less now than it did a month ago.
The average in South Jersey is off 46 cents, or 12 percent in the last month, to $3.46 a gallon yesterday, according to AAA Mid-Atlantic. In Southeastern Pennsylvania, the average was $3.67, off 44 cents, or 11 percent. New Jersey's state gasoline tax is 16.6 cents less than Pennsylvania's, accounting for most of the difference in prices from one side of the Delaware River to the other.
Caught in the downdraft of sliding crude-oil prices, average gasoline prices nationally have fallen for six straight weeks, according to the federal Energy Information Administration.
Crude prices fell to $114.98 yesterday from closing high of $145.29 a barrel on July 3. Soon thereafter, traders began shifting their focus from weak supply growth and seemingly unstoppable demand growth in China and India to slowing demand in the United States.
From August 2007 through last month, total petroleum consumption fell 2.7 percent, the sixth sustained drop in consumption in the last 25 years, the U.S. Department of Energy said.
Teacher Megan Naphy, 25, did her part. "I'm not making as many trips to the Shore" because of the price of gasoline, she said.
Ultimately, though, the impact of changes in habits by people like Naphy is muted by the global market. "Demand for gas is driven largely by increased demand in India and China," said Lars Perner, an assistant professor of clinical marketing at the University of Southern California in Los Angeles.
June's 4.6 percent decline in miles driven by U.S. motorists compared with a year ago amounted to a drop of 19.4 million gallons a day in gasoline demand, according to Jefferies & Co. Inc. But, the investment-research firm said, that decline was offset by an increase of 19 million gallons per day in China's demand for gasoline and diesel.
Despite their fast growth – at least quadruple the U.S. rate over the last decade - India and China together still consume only a little more than half as much oil per day as the United States.
Larry D. Compeau, an associate professor of marketing at Clarkson University School of Business in Potsdam, N.Y., said the key to whether U.S. consumers stick with fuel-saving lifestyle changes depends on how deeply those changes have become embedded in their self-image.
"Some people have found they get a certain amount of pride and satisfaction" from "saving the environment" or reducing dependence on foreign oil by driving less, Compeau said.
Others have only begrudgingly made changes to save money. "Once the savings goes away, they will switch" back to their old ways, Compeau predicted.
Then there are people like Philadelphian Aaron Tisdell, who said yesterday that paying more than $4 a gallon this summer did not cause him to drive less.
"You've got to know how to budget your money," Tisdell said, after paying $3.61 a gallon at the Shell at 12th and Vine Streets in Center City.
Contact staff writer Harold Brubaker at 215-854-4651 or hbrubaker@phillynews.com.


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