Feeling The Pinch At The Pump
WALL, N.J. -- Bah! Humbug! According to Oil Price Information Service (OPIS) retail data, gasoline prices are nearly $1.35 per gallon higher than they were during 2008's holiday season. While some prices at the pump are inching to $3 or more per gallon, according to the data U.S. pump prices could rally to their second highest level in recorded history by next spring.
The new study "Consumer Reaction to High Gasoline Prices: What It Means for Retailers" released by the PortiaGroup with data provided by OPIS looks at the likely consequences of the gas price surge. The study concludes that rising gas prices are more relevant to household budgets and that higher fuel prices motivate stunning behavioral changes in consumer shopping patterns when it comes to premium vs. discount regarding fuel and other merchandise, according to an OPIS press release.
Example: On a national basis, the average household will spend roughly $305 on gasoline in December 2010, up 13.6 percent from last year but up a whopping 76 percent from December 2008 when consumers paid about $1.65 a gallon for fuel. This year’s numbers represent an average 7.4 percent of median household income. That is up 6.5 percent from last year, and compares with a 4.2 percent bite in December 2008.
Broken down by the country's states, households in Montana currently see gas expenses that reflect about 12.7 percent of family income; Mississippi is spending about 12.3 percent; southern states see greater fuel expenses than wealthier states in the northeast and upper Midwest; and states seeing fuel costs well above 10 percent of income include Louisiana, south Carolina and Arkansas, according to the study. New Yorkers have seen a rise of more than 12 percent since last December. But states whose fuel costs account for less than six percent of income include Maryland, Massachusetts, Nevada, Illinois, Hawaii, Colorado and Minnesota.
The OPIS and PortiaGroup study also takes a look at what state-specific fuel prices might look like if early 2011 follows anything resembling recent price templates for retail gasoline.