Consumers Becoming Pessimistic as Gas Prices Keep Rising
ALEXANDRIA, Va. -- Concerns about the economy and gas prices are beginning to take their toll on consumers, making them increasingly pessimistic, according to the monthly NACS Consumer Fuels Survey.
According to NACS, the Association for Convenience & Fuel Retailing, nearly one quarter (23 percent) of consumers surveyed in a national poll of gasoline purchasers are "very pessimistic" about the economy, a significant increase from the 18 percent who said that they were very pessimistic in NACS' January consumer poll. Consumers age 50 or older were the most pessimistic (27 percent), while those age 18 to 34 were the least pessimistic (16 percent).
Overall, 59 percent said that they were either "very pessimistic" or "somewhat pessimistic." That number represents an increase from the 54 percent who said that they were pessimistic in January.
Gas prices are a top concern for consumers. Prices at the pump have been steadily climbing since the beginning of the year -- though some reports today indicate things could be easing soon.
"The streak is over, folks. At least for now," Patrick DeHaan, a senior petroleum analyst with GasBuddy.com posted on the website today. "GasBuddy data showed the national average rising for 32 consecutive days -- starting Jan. 20 at $3.265/gal, and ending Feb. 21 at $3.733/gal. The tide has now turned and the national average has dropped two days straight. This is certainly excellent news for all of you disillusioned motorists -- but I would caution you not to get overly thrilled as prices may linger near these levels for some time."
The recent rise in gas prices comes after pump prices averaged a record high in 2012. According to the NACS survey, nearly half of all consumers (44 percent) surveyed now say that gas prices have a "great impact" in how they feel about the economy, a significant increase from the 38 percent who felt that way in January. Overall, 87 percent of consumers say that gas prices have an impact on their feelings about the economy.
"The survey results confirm what our members are telling us: consumers are feeling the pain from higher gas prices, and this is affecting their feelings about the economy in general," said NACS Vice President of Government Relations John Eichberger. "Worse, consumers see no end in sight, with 62 percent saying that they expect prices to be even higher in the coming weeks."
The association also asked consumers what some of the causes for higher gas prices are. Four in 10 cited government regulations (41 percent) and world events (40 percent), but most consumers (71 percent) said the oil companies were a reason for higher prices. In addition, 31 percent said that gas retailers were to blame. However, when asked who is most to blame for higher prices, oil companies were cited by 45 percent of consumers, compared to only 4 percent who complained about gas retailers.
"While some consumers may seek to blame gas retailers for higher prices, fuels retailers have very little control over the market and are in fact struggling with the recent increase as well. Today, gross margins on fuel are only about 10 cents per gallon, far below the five-year average of 17 cents per gallon. With expenses, especially credit card swipe fees, averaging 12 to 16 cents per gallon, it's not a question of how much retailers are making per gallon, but if they are able to simply break even," Eichberger explained.
As a result of higher gas prices, 45 percent of consumers said that they are driving less, and 37 percent said they are combining trips. Government data confirms this trend, with the U.S. Energy Administration reporting that gasoline demand was down 2.8 percent in January compared to the month prior, NACS added.
Consumers also are more aware of gas prices, with 30 percent shopping harder for lower prices, 24 percent using a gas discount or loyalty card, 22 percent shopping at partner stores that combine discounts and 18 percent buying from gas stations that offer special promotions.