Business

<< Previous   of   Next >> Associated Press  (click to enlarge) Russ Conde, of Kingston, N.H., fills his truck with gas at a fueling station in Waltham, Mass. Americans are now paying more for gasoline than a year ago, and pump prices are expected to stay higher for several months as the nation heads into the holiday shopping season.   ADVERTISEMENT   CONTACT THE HERALD Mike Benbow, Business Editor benbow@heraldnet.com   Published: Saturday, October 31, 2009 Bad time for pain at the pump Associated Press NEW YORK — Americans are paying more for gasoline than they did last year as the holidays approached — billions of dollars that could go to books, clothes and Barbie dolls instead being spent at the pump. Gas averaged nearly $2.70 a gallon nationally on Friday, the highest of the year — adding bad news to an already fragile economy and making it even less likely that people will spend their way out of the recession. Locally, regular gas was $2.846 cents a gallon in the Seattle- Bellevue-Everett area Friday. That was slightly less than 10 cents a gallon more than a year ago. Americans didn’t have much going for them financially in late 2008, but they did have this: Gas prices plunged by 93 cents per gallon between Oct. 30 and the end of the year. It was like a generous energy tax break, just in time for the holidays. Thanks mostly to the weak dollar, that’s no longer the case. And when a gallon of gas runs from $2.50 to $3, people begin to notice, energy experts say. People make a “clear emotional connection” between the price of gas and how much they spend on other things, said Wendy Liebmann, who monitors shopping habits through her firm WSL Strategic Retail. “It nibbles out of our paycheck, and there’s nothing we can do about it,” Liebmann said. “We’ve got to get the kids to school. We’ve got to get to work if we’re lucky enough to have a job.” As gas prices soared from 2006 to 2008, people became increasingly tightfisted, a survey by WSL found. When gas peaked above $4 a gallon in July 2008, more than two-thirds said they had cut back on other spending so they could still use their cars. Prices today are a far cry from the peak. Crude oil, which neared $150 per barrel last year, is trading at about $80 now. But drivers are feeling the pain nonetheless. Anything more than $3 a gallon “is high for me,” said Rene Contreras, 24, as he filled his Chevrolet Monte Carlo at a Chevron gas station in Los Angeles that was charging $3.17 a gallon. Contreras added only a half tank before rumbling off. “I might give lower-income gifts because of the gas prices” this Christmas, Contreras said. Gas prices are rising even as Americans drive much less than they did before the recession hit, and as the country sits on massive petroleum supplies. A weak dollar is making fuel more expensive. Prices will probably stay high because oil companies have become much more conservative about producing fuel after getting burned by the dramatic fall in energy prices last year. Spending $40 to $50 every time you fill up your tank has a domino effect, said Amy Jaffe a fellow at the James A. Baker III Institute for Public Policy at Rice University. “That’s a new pair of jeans. I’m making a decision between filling my tank and buying a new pair of jeans,” Jaffe said. “When we get to that point, you can expect that to hurt the economy.” READER COMMENTS Be the first to comment. You must be a registered user and verify your e-mail address to post comments to blogs or articles on HeraldNet. To register, click here. To read other terms and conditions, click here. Log out

1. Tulalip man, 20, charged with baby boy's murder 2. Donated safe gives Marysville museum a mystery 3. Fears over commercial air service at Paine Field dismissed 4. Everett officer charged with manslaughter reveals plan for defense 5. Merchants reject security for downtown Snohomish 6. Holmgren interested in returning to Seahawks 7. Friends open account for orphaned daughters of Highway 9 crash victims 8. Crack That Safe 9. Country singing contestant Chance McKinney amazed by his fans 10. Have M’s, Figgins reached a deal? 2 - Top 10 Stories Most Talked about 3 - Top 10 Stories Most Emailed

• Wildcats fall to familar foe in semis • ‘Nutcracker' times three • Road warrior • Mavericks reloading • Holiday Lightings & Santa Sightings • Cities prepare for winter blast repeat • Wolfpack duo takes last shot at state tourney • This Weekend in Your Town • Tips for the stormy season • Boeing will build, flight test and deliver 787s in South Carolina to spe ... • Snohomish County EDC promoting job growth in key industry clusters • $4 million grant to advance brain tumor research has Everett links • Providence medical center construction tops off its 12-story steel frame ... • Tulalip affordable housing project to be financed by KeyBank, Raymond Ja ... • Arlington's Lak of Ink has a growing following for Luke Kooyman's creati ... • Bank of the Northwest formed • Cascade Bank earns $1.6 million