June 9, 2008

The Road Less Traveled

The high price of gas has people staying close to home and looking for other ways to save.

By Kathryn Satterfield

Family fun just got a lot more expensive--if you're planning a road trip, that is. Over the weekend, the average price of regular gas rose to $4 a gallon for the first time. Prices have doubled over the past year, increasing by about 20 cents in the past three weeks alone.

DAVID MCNEW—GETTY IMAGES Riders in Los Angeles, California, crowd onto the subway.

The price at the pump is expected to keep rising. Crude oil now costs about $140 a barrel, after prices shot up by more than 13% last week. It was the largest two-day price hike in history.

The price hikes are being felt across the country. In California, it costs an average of $4.44 per gallon to fill up the tank. For road warriors seeking a bargain, Missouri is the state with the cheapest gas, at $3.80 a gallon.

Full Speed Ahead

What's driving these high prices? The rising cost of oil is partly to blame. Crude oil is a black, sticky liquid pumped from deep beneath the earth's surface. We rely on this natural resource to heat our homes and to make plastics and other everyday materials. But we burn through most of it to fuel our cars, planes and other methods of transportation.

Soaring demand in Asia and other parts of the world is putting a strain on already tight world oil supplies. Leaders from the largest oil-consuming nations have urged oil producers to boost production levels. But energy experts say that most oil-producing countries can't increase supplies. In Nigeria, a major U.S. supplier, a strike later this week could remove 450,000 barrels in daily oil supplies from the market. That could send gas prices soaring even higher.

Staying Close to Home

Summer vacation plans aren't the only things to get a red light. Many people are now turning to buses, subways and other public transportation to get around every day. In the first three months of 2008, the number of trips taken on public transit rose 3% to 2.6 billion. Sales of gas-guzzling SUVs and trucks have hit a major roadblock. In the worst cases, people are having to choose between food or gas.

Local governments in some southern states are letting grass grow high along roads and cutting back on road repairs to trim fuel costs. And businesses throughout the U.S. have considered cutting the work week from five to four days to save their employees the cost of a day of traveling.

Meanwhile, the whole world is looking for a more permanent solution. On Monday, Saudi Arabia called for a summit to discuss soaring energy prices. Saudi Arabia produces about 9.4 million barrels of oil a day, and could increase that amount by about 2 million barrelsa day. "There is no justification for the current rise in prices," said Iyad Madani, Saudi Arabia's Minister of Information and Culture.

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