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Mon, May 08, 2006 - Page 10 News List

Americans tighten belts as high gas prices start to bite

ENERGY PINCH High prices are increasingly affecting middle and higher-income families, with many reducing the amount that they drive


Americans are driving less, trimming vacations and cutting back on heating and air conditioning, according to an AP-Ipsos poll taken as gasoline prices in many areas have topped US$3 a gallon (US$0.80 per liter).

Seven in 10 say gas prices are causing a financial pinch. And that pressure is being felt increasingly by middle-income and higher-income families.

"Now, I'm just going to work and coming home -- not doing anything else," said Kathleen Roberts, who makes a daily, 161km round trip from York, Pennsylvania, to her teaching job in Baltimore.

Like many Americans, Roberts is trying to adjust to gas prices that have risen steadily over the last five months. The price of a gallon of regular-grade gas is now almost what it was soon after Hurricane Katrina battered domestic refineries along the Gulf Coast last August.

The average price of a gallon of regular gasoline was US$2.92 on Friday, according to AAA, the motorists' club. The all-time high came last year on Labor Day, according to AAA, when that same gallon cost US$3.

When asked what would be a fair price for gasoline, many of those surveyed said US$2-a-gallon on average -- a price not seen consistently in the US for more than a year, according to AAA.

Energy analysts blame the higher prices on a tight supply internationally, unstable politics in oil-producing countries and fast-growing economies in places like China and India.

Whatever the reasons, soaring gas prices are impacting on behavior.

Two-thirds of people said they have cut back on driving and have reduced the use of heating and air conditioning. Half now say they have trimmed their vacation plans.

Hearing talk about vacation cutbacks upsets Susan Morang, a psychiatric counselor from Washington, Maine.

She helps clients deliver antiques for sale during the summer tourism season.

"Each summer, you have to make the majority of your money to live on the whole rest of the year," said Morang, who has cut her own driving to the minimum.

Morang's GMC truck guzzles gas, but she said she needs it to help clients haul their belongings.

"A lady paid me US$40 yesterday," she said. "I used it to fill my gas tank halfway."

The number of people who say gas prices are causing them money problems has risen from half to two-thirds in the last year, the poll found.

Just over six in 10 of those who make between US$50,000 and US$75,000 a year now say gas prices are a hardship -- up from four in 10 a year ago. And more people say they will reduce driving, travel and utility use.

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