Copyright 2000 Star Tribune
Star Tribune
(Minneapolis, MN)
June 18, 2000, Sunday, Metro Edition
SECTION: NEWS; Pg. 1A
LENGTH: 1406 words
HEADLINE:
Drivers protest, postpone, then pay $2 a gallon for
gas;
The price of gas hasn't led to wholesale changes in
driving habits because it isn't hurting that much yet, an analyst says.
BYLINE: Donna Halvorsen; Staff Writer
BODY:
Rose Doyle of Minneapolis won't be driving to
Monticello to see her boyfriend for a while.
"He's got to come to me," she said.
Nora Lubner said she might not be driving
from Minneapolis to St. Cloud to see her boyfriend, either.
At $1.90 a gallon and
rising, gasoline is draining money out of Twin Citians' pockets
and changing some of their routines.
Some
say they're doing errands more efficiently. Others aren't filling their tanks.
Some are resorting to bikes and motorcycles. Some aren't driving as much. Some
say they have no choice but to drive to work.
"Ridiculous," "upsetting," "annoying" and "a
ripoff" are among the words that they used to describe prices as they pumped gas
at local stations last week.
The sticker
shock is understandable. A year and a half ago, a gallon of unleaded regular
cost less than $1 in the Twin Cities metro area. Now it's
pushing $2.
The average
price for a gallon of unleaded regular was $1.74 Friday across
Minnesota, according to the American Automobile Association of Minneapolis. But
many Twin Cities stations were charging $1.90. The national
average was $1.63.
Roger
Czerniak of Maple Grove, on his way to an auto show at the State Fairgrounds in
St. Paul on Friday, spotted a $1.79 sign but decided to get gas
a bit closer to the fairgrounds. He ended up paying $1.89, and
he wasn't happy.
Czerniak said he's
responding to the prices by trying to do more business by phone, but he thinks
it's the federal government that should be responding. He said he wants to know
"why they don't immediately step in and why they don't make the gas companies
respond immediately."
Tom McCarthy of St. Paul
wants government action, too. He said he's concerned about the effect of high
prices on the economy, and he has called Minnesota's U.S. senators and the White
House to complain.
"My hope is that they really
look at this and react to their constituents," he said.
McCarthy said he doesn't trust the
oil industry, he doesn't believe there's any shortage of gasoline, and he
wonders why prices are higher in the Midwest than elsewhere.
"We're such nice people," he said.
"Why are they picking on us?"
In
fact, high prices in Milwaukee and Chicago prompted members of Congress to ask
questions last week. On Friday, President Clinton said the Federal Trade
Commission (FTA), the Environmental Protection Agency (EPA) and the Energy
Department all are investigating.
EPA
director Carole Browner said Friday that so far there is no evidence of a gas
shortage in the Midwest, nor can the prices be explained by federal requirements
that cities with polluted air begin using cleaner-burning gasoline.
In Milwaukee, the average price for
regular unleaded on Friday was $2.00. In Chicago, it was
$2.11.
So far, the high
cost of gassing up doesn't seem to have affected car buying in the Twin Cities.
Auto dealerships don't see any move toward
fuel-efficient cars.
They don't see a move
away from sport-utility vehicles (SUVs) and other popular low-mileage vehicles,
either.
"We have not seen anybody walk
away from a sale because of gas prices," said Vicki Valli, a sales manager at
Freeway Ford in Bloomington.
Matthew
Hozouri, a sales manager at Rosedale Dodge in Roseville, said that even people
who are buying cars instead of SUVs or pickups want larger engines. "They don't
want four-cylinders," he said. "I guess they have a love affair with the bigger
engine and more power."
Jim Paul, a
partner in Valley Oldsmobile-Pontiac-GMC in Apple Valley, said that business may
have slowed a bit, but that there's still demand "for all those vehicles that
don't get such good mileage." In fact, he said, "the very hottest vehicle we've
got right now is the Yukon XL," a large SUV that gets about 15 miles to the
gallon.
But consumers are reacting to gas
prices in other ways.
"I think twice
before I leave," said Karen Collins of Burnsville. "If I'm gonna leave, I'll do
several errands at once."
Ann Grover of St. Paul
said it's her son who has to reckon with the high prices. She told him he can
use her car only if he buys the gas.
"He
wasn't real thrilled" by her decision, she said, but he found a way around it.
"Last night he had the car, but he made all his friends chip in for gas," she
said.
Peter Ott of Minneapolis said his
son's allowance doesn't stretch to cover gas at current prices, so he fills up
his son's tank. As for himself, Ott said, "Most of my travel is to and from
work. I'm just going to have to bite the bullet."
For some drivers, high prices may mean no
lines at the pump, even during rush hour. With no one behind him at a pump last
week, Michael Thornton of Minneapolis had time to contemplate his options. He
has a bike, he said, and a motor scooter that he uses for "quick get-arounds" _
trips to the store for milk, for example. He said
he's thinking of getting a motorcycle, and he doesn't fill his car's tank
anymore. "I'll do a half tank and wait for the price to drop," he said.
That's Nora Lugner's solution, too. "Now I
put $10 in each time, hoping [the price] will go down," she
said.
There are holdouts, people such as
Stephanie Nicholson of Minneapolis, who said she's not driving less and doesn't
intend to. If the price goes to $2 a gallon, "I'll have to pay
it," she said. "I have to go places. If I let gas stop me, I'll never go
anywhere."
.
Still a bargain?
Some economic experts question whether the
recent round of gas price increases will have much effect on consumers.
"Petroleum prices in general have declined in importance in the last 20 years or
so," said Severin Borenstein, director of the University of California's Energy
Institute at Berkeley. The decline is attributed to the nation's shift from a
manufacturing to an information and services economy.
"Even at $2 a gallon, the
prices are lower than they were in the late 1970s and early 1980s, when gas hit
around $2.50 a gallon [in year 2000 dollars,]" Borenstein said.
"And even if they stay at about $2 a gallon there won't be a
huge impact."
Borenstein said that in
general, it takes a 10 percent increase in the price of gasoline to result in a
1 percent decrease in consumption. Compare that, he said, with most other
consumer goods in which a 10 percent price hike would spark a 10 percent drop in
consumption, he said. Driving plays such a large part in most Americans' lives
that it would take substantial and lasting price increases to get people to
change their behavior.
That hasn't
happened yet with gasoline, and it's unlikely to happen, Borenstein said. "The
typical American family with two cars burns about 80 gallons of gas a month," he
said. "That means the 40-cent-a-gallon increase we've seen [recently] costs them
an extra $32 a month. That translates to about
$1 a day, about the price of a cup of coffee."
.
_ Staff writer Susan Feyder contributed to this report.
.
Vacationers feel the pain of high gas prices
.
Regular
unleaded gas jumped from $1.11 a gallon in June last year to
$1.74 a gallon this month, according to AAA Minneapolis. This
summer, vacationers will see a big increase in what they pay to fill up their
tanks. AAA provided a list of the Top 10 vacation spots out of Minneapolis.
Based on getting 23 miles per gallon, this chart shows what a Minnesota driver
paid last June on these trips compared with this June.
.
NOTE:
Trip price calculations were based on the Minnesota average price, not the
national average price.
<PRE>.
Destination Miles round
trip June 1999 June
2000
Mt.
Rushmore 1,250 $60.27 $94.48
Yellowstone 2,100 $101.34 $158.86
Chicago 800 $38.63 $60.55
Door County,
Wis. 640 $30.86 $48.37
North
Shore 490 $23.64 $37.06
Niagara
Falls 1,880 $90.69 $142.16
Colorado
(Denver) 1,820 $87.80 $137.63
Grand
Canyon 3,520 $169.83 $266.22
Boston 2,760 $133.20 $208.80
Wisconsin
Dells 428 $20.65 $32.36
</PRE>.
Source: AAA of Minneapolis
GRAPHIC: CHART; MAP
LOAD-DATE: June 20, 2000 
