RODALE NEWS, EMMAUS, PA—Due to increased demand and pricier mixes of gasoline, gas normally gets more expensive in the summer. We’re not there yet, but prices are already starting to inch toward $3 per gallon in some areas of the country. With people cash-strapped from the recession, and the job market still lagging, a spike in gas prices similar to the one we saw in 2008—when the national average reached $3.78 per gallon—could leave a lot of people hurting. Maybe you included.
THE DETAILS: A new report from the environmental nonprofit Natural Resources Defense Council (NRDC) examined the economic impact of another such spike and found that drivers in some states could end up spending 11 percent of their income on gas if oil prices reach 2008 levels. The report computed the average gas price in each state, along with the number of drivers and their average income, and found that residents in Mississippi, Montana, Louisiana, Oklahoma, and South Carolina now pay the highest percentages of their incomes on gas, at 5 to 6 percent. Residents in New Hampshire, Maryland, Massachusetts, New York, and Connecticut now pay the least, at less than 2 percent.
However, if gas prices spike again, residents in that first group could be spending 9 to 11 percent of their income on gas. For comparison, the U.S. Department of Agriculture estimates that the average American spends about 10 percent of disposable income on food. It’s not necessarily because gas prices are higher in those states, says the report's author Deron Lovass, NRDC's federal transportation policy director. The numbers are based on the average household income of those states and how much driving residents must do—either because of sprawling development, lack of public transportation, or less fuel-efficient vehicles.
WHAT IT MEANS: In other words, should gas prices spike again, you could be spending more money on gas than food. "Given that we're talking about $3 a gallon for gasoline and we're not even in June, the odds are pretty good we'll see prices rise as they did in 2008, which was just an incredible year in terms of increases," says Lovass. He says that the transportation bill that Congress will begin debating after its spring recess should focus on funding more public-transportation projects and smarter city planning that will allow people to walk or bike more, rather than drive. "We need to start providing drivers with more options," he says.
That, of course, could take years. “The best thing to do right now is use public transportation whenever possible, and telecommute if you have that option, to avoid driving entirely," Lovass says. At the very least, he adds, it's a good idea to line up transportation or commuting alternatives, such as public transport or carpooling, if prices do spike. "And when you drive, try to make your car more efficient," he says. "Do common-sense things such as keeping your car tuned up, changing the air filter regularly, taking heavy items out of your trunk, and removing roof racks when you don't need them." Bonus: Getting by on less gas means fewer pollutants are released into the air and, to the extent that you get around on foot or by bike instead of driving, you get a little more exercise.