BRATTLEBORO — Leslie Cornick, who lives in Saxtons River and commutes to Brattleboro, has reached the point where she has talked to her boss about telecommuting one day a week to her job at an Internet services firm.
“I'm spending $8 to $10 a day on gas,” Cornick said. “I just can't do that.”
Rising gasoline prices are affecting the driving habits of citizens like Cornick and their broader spending decisions.
The federal Department of Energy's Energy Information Administration says it will only get worse.
The EIA's April 8 forecast for summer gasoline demand and expected prices only confirmed a trend that area residents have been seeing for several months.
The government expects the price of gas to continue rising into the spring and summer, perhaps to a nationwide average of $3.60 per gallon by June, an increase that comes despite a projection that the number of miles U.S. citizens drive will decline for the first time in 17 years.
But the forecast already seems like wishful thinking locally.
Gasoline averaged $3.23 per gallon in New England in the first week of April. An informal survey found slightly higher prices in Brattleboro, Putney, and Bellows Falls: around $3.28 for regular grade on April 8. Another informal survey, on April 20, measured a 17-cent increase, to $3.45 per gallon.
Cornick considers herself lucky to have a job that might allow telecommuting. For others, high gasoline costs are imposing an unavoidable crimp on their income.
Tara Sullivan, a teacher who commutes from Brattleboro to Putney four days a week, has seen her increased gasoline expenses put a crunch on her family's budget. “We already try to live frugally, but this is really affecting our ability to save,” Sullivan says. “I'm spending $50 a week on gas.”
The rise in costs comes at the same time the home heating season is ending, and seems to be replacing that part of the family budget. “It's a good thing that it's warming up, at least,” Sullivan notes. “We spent $600 on home heating oil in March.”
The continued rise in fuel costs is also contributing to an increase in the cost of food. Even with a strong local food movement in Vermont, it is too early in the year for local farms to provide much produce to vendors and community-supported agriculture shareholders. That has meant that increases at the grocery store have also contributed to tightened wallets.
Why the rising costs?
National analysts attribute the continuing rise to a variety of factors.
The price spike in the middle of April came amid reports that rebels had attacked pipelines in Nigeria. Simultaneously, there was news that the OPEC countries continue to view the price of crude oil as the result of a weakening U.S. dollar and low refining capacity, rather than a shortage of supply.
Add to that the new mandate imposed by Congress for an increase in ethanol use, which imposes higher refining costs, and the competition for energy that is coming from the booming economies of India and China, and some people see nowhere for crude oil prices to go but upward.
The price of crude oil is not immediately related to the price of gasoline, although its share of the overall cost of gasoline rose substantially in 2007, according to a report from the attorney general of Washington state.
Still, since traders buy and sell crude oil futures, the current record-high per barrel prices are largely based on assumptions about future trends.
Even so, current conditions influence patterns of buying and selling. Because oil is priced in dollars on the international market and the dollar is historically weak against the euro and other currencies right now, investors are driving up the price of oil and other commodities as a hedge against further currency weakening, inflation, and threats of an impending recession.
The cost at the pump, however, is influenced most directly by how the individual station owner perceives his or her future bills. Gas stations price fuel according to how much they expect to pay for their next delivery after factoring in their overhead and profits.
Into the future
The real question that remains is how people will respond if prices continue to increase.
The EIA's summer forecast was rosy compared to those of some private industry analysts who think gas will rise to $4 per gallon by June and July.
If gasoline prices rise to that level, the product's price would approach that of diesel fuel, which has recently averaged $4.20 per gallon nationally. It had already reached $4.50 in West Dover last month.
Area residents who drive hybrids and diesels, however, are doing pretty well.
Kristin Dawley, of Putney, who drives a diesel Volkswagen Rabbit, says she hasn't really seen the increased cost hurt her budget.
“I get 50 miles to the gallon,” Dawley said. “I'm paying extra now, but not often enough for it to really impact our budget.”
For other, though, high gas prices are spurring behavioral changes, not just spending reallocations.
Craig Miskovich of Brattleboro says the rising cost of gasoline is prompting him to buy a bicycle, for example.
“People talk about how the best way to bring change on fossil fuels use is through the cost mechanism, and I can see how that works,” Miskovich said.
And in his case, he said, responding to the issue by buying a bike might not be such a bad thing.
“I'm responding to this issue, and it's going to help my health at the same time,” Miskovich said. “More exercise, saved expenses, and burning less fossil fuel.”