Consumers Are Overcoming Sticker Shock at the Pump
WASHINGTON, D.C. — Americans' perception of what they consider "too expensive" at the gas pump is shifting, AAA found.
According to the 2019 Gas Price survey, half of consumers think paying $3 per gallon is too high, a 30-cent increase from 2018, when half of consumers considered $2.70 to be too expensive.
The too-high price point of 2019 is also 50 cents more than in 2016, when half of consumers thought $2.50 was too much to pay. Americans are feeling numb to pain at the pump as gas price sensitivity has lowered over the past three years, AAA stated.
"For consumers today, paying more to fill-up their gas tank may feel less shocking due to the national average pushing within pennies of $3/gallon the last two spring seasons," said Jeanette Casselano, AAA spokesperson. "However, there is good news for consumers this summer — the highest prices of the year could be in the rearview mirror. With most refineries operating at normal levels, demand at robust rates, and cheaper crude oil prices, summer gas prices are poised to be a little less than last year — dropping as much as a dime to lower the national average to $2.70."
Despite their increased tolerance for higher gas prices, nearly three in four Americans (74 percent) make lifestyle changes to offset higher gas prices, and of those, 24 percent said that $2.75 per gallon is the price that would prompt them to change their habits or make different choices. Common changes include:
- Combining errands or trips — 65 percent (down from 79 percent in 2018)
- Driving less — 60 percent (down from 73 percent in 2018)
- Reducing shopping or dining out — 49 percent (down from 61 percent in 2018)
- Delaying major purchases — 43 percent (down from 50 percent in 2018)
- Driving a more fuel efficient vehicle — 35 percent (down from 46 percent in 2018)
This summer, AAA expects domestic gasoline demand to reach some of the highest levels on record in the United States. As domestic gasoline stocks are at the lowest level going into June since 2016, increased demand could prompt modest price increases at the pump.
However, there is also the possibility that gas demand will fall due to inclement weather. According to the National Oceanic and Atmospheric Administration's Climate Prediction Center, this year's hurricane season could produce nine to 15 named storms, including four to eight hurricanes.
"The price of crude is a driving factor when it comes to retail gasoline prices, accounting for nearly 60 percent of the price motorists see at the pump year-round," Casselano added. "While crude prices have been cheaper this year, AAA is monitoring a number of circumstances that could cause crude oil market prices to increase. This includes reductions in global and domestic crude supply, exports, and U.S. gasoline demand."