The Star-Ledger

We Are Going To Pump You Up

Surviving the summer gas crunch

The Star-Ledger — Sunday, April 16, 2006

BY TOM JOHNSON
Star-Ledger Staff

When gas prices topped $3 per gallon last fall, Sasha Merljak made some changes.

The 30-year-old owner of a printing business in Neptune sold his 1963 Cadillac and a slightly newer van, both of which sputtered around town guzzling gas at about 13 miles per gallon.

Now, Merljak relies on a bicycle or his wife's gasoline-electric hybrid Toyota Prius, an arrangement made easier by the fact he runs his own business out of his home. Still, he said he isn't very happy to see prices at the pump creeping upward once again.

"For the people who depend on their cars, like plumbers and carpenters, it's just terrible," says Merljak, noting the latest bump in prices has deterred him from thinking about buying a replacement vehicle.

The average price of regular gasoline has jumped to $2.54 a gallon, a 38-cent gain in the last month, according to the AAA of North Jersey. The run-up in prices is unusual for this time of year, analysts said, but is unlikely to afford consumers any break until next month. A year ago, drivers were paying on average $2.08 a gallon, said William Visser, a spokesman for the agency.

The latest gasoline-price surge isn't expected to crash the $3-per-gallon milestone that was passed last fall in the wake of two hurricanes that left oil and gas production in the Gulf of Mexico in tatters. But drivers will likely be paying about 25 cents more a gallon this summer than last year, according to the U.S. Energy Department's summer outlook.

"This is an unusual spring," said Elias Johnson, an energy analyst for the agency. "It's been almost a perfect storm to lead to this bump in prices."

Many factors are contributing to the higher prices, Johnson said, including higher crude oil costs, requirements to produce less-polluting gasoline, continued instability in oil-producing areas such as Iraq, and the continued shutdown of oil-producing wells in the Gulf.

The agency doesn't expect prices to begin dropping until later in May when refineries, which typically go through maintenance work at this time of year, begin coming back to full operations, Johnson said. Also, later this year, more ethanol production should come on line, helping to ease worries about the phase-out of methyl tertiary butyl ether, or MTBE, from gasoline, he said. The latter additive is being eliminated from gasoline because it was found to easily pollute water supplies.

The more costly ethanol will replace MTBE, but it could lead to an increase in prices in the short-term, analysts said.

"We are certainly on a collision course getting real close to $3 per gallon," said Tom Kloza, chief oil analyst for Oil Price Information Services in Wall Township.

The switch to ethanol has been a big factor in prices jumping in the Northeast, said Jim Benton, a lobbyist for the New Jersey Petroleum Council. This spring, about 6.3 million barrels of ethanol have been brought into the region, up from just 4 million barrels a year ago.

"That's is really complicating the transition from winter-time gas to summer gas. That and the higher cost of crude, which is trading now at $68 a barrel," Benton said, just the fourth time ever it has traded at that level. Last year, a barrel of crude was trading around $51, or 32 percent less than it is now.

The government's outlook projects gas will cost an average $2.62 a gallon this summer, but that is below the $3 mark some analysts have warned could occur. But others are more pessimistic, saying even with last year's record prices, Americans have done little to change their habits in terms of energy consumption.

"Three dollars per gallon is already baked in the cake," said David Kotok, chairman and chief investment officer of Cumberland Advisors, a money management firm based in Vineland. "The issue is whether or not we will approach $4. In our view, it will take a sustained gasoline price near $4 to really cause Americans to change their behavior and alter consumption patterns toward more conservation."

But Kloza said prices could dip dramatically if "we get through August without a Category 3 hurricane" damaging oil refineries or drilling platforms.

"This could be the year where you drive up to your pump in Summit and pay $3 per gallon in May and then end up paying $1.75 a gallon by Thanksgiving Day," he said.

Despite the higher prices, the outlook projects no drop in demand. Gasoline consumption this summer is expected to grow to an average of 9.4 million barrels per day, or 1.5 percent above last summer's average. That projection conflicts with a recent Gallup poll that found nearly half of all Americans have cut back "significantly" due to high gas prices.

Charles Schalk, the managing partner of a law firm, is one of them. Instead of using a family-owned van, when he and his wife and three children have to drive any distance, they hop into his Honda Accord, Schalk said.

"I can drive around at the bargain rate of $30 a tank instead of $50," said the Raritan Township resident.

Consumer advocates said the rising cost of energy is of paramount concern to the public.

"Folks are just so squeezed," said Ev Liebman, program director of New Jersey Citizen Action. "They want some action on it. People don't buy the argument it is just how the market works -- especially when they see the huge profits the oil companies are making."

Here are some driving tips to save money.

Aggressive driving (speeding, rapid acceleration and braking) wastes gas. It can lower your gas mileage by 33 percent at highway speeds and by 5 percent around town. Sensible driving is also safer for you and others, so you may save more than gas money.

Fuel Economy Benefit: 5–33 percent

Equivalent Gasoline Savings: $0.13–$0.88/gallon

Observe the Speed Limit While each vehicle reaches its optimal fuel economy at a different speed (or range of speeds), gas mileage usually decreases rapidly at speeds above 60 mph. As a rule of thumb, you can assume that each 5 mph you drive over 60 mph is like paying an additional $0.19 per gallon for gas. Observing the speed limit is also safer.

Fuel Economy Benefit: 7–23 percent

Equivalent Gasoline Savings: $0.19–$0.62/gallon

Remove Excess Weight: Avoid keeping unnecessary items in your vehicle, especially heavy ones. An extra 100 pounds in your vehicle could reduce your MPG by up to 2 percent. The reduction is based on the percentage of extra weight relative to the vehicle's weight and affects smaller vehicles more than larger ones.

Fuel Economy Benefit: 1–2 percent/100 lbs

Equivalent Gasoline Savings: $0.03–$0.05/gallon

Other tips

Avoid Excessive Idling

Idling gets 0 miles per gallon. Cars with larger engines typically waste more gas at idle than do cars with smaller engines.

Use Cruise Control

Using cruise control on the highway helps you maintain a constant speed and, in most cases, will save gas.

Use Overdrive Gears When you use overdrive gearing, your car's engine speed goes down. This saves gas and reduces engine wear. Note: Cost savings are based on an assumed fuel price of $2.68/gallon. Data Sources: www.fueleconomy.com; U.S. Department of Energy.

CAR CARE TIPS

Keep Your Engine Properly Tuned

Fixing a car that is noticeably out of tune or has failed an emissions test can improve its gas mileage by an average of 4 percent, though results vary based on the kind of repair and how well it is done.

Fixing a serious maintenance problem, such as a faulty oxygen sensor, can improve your mileage by as much as 40 percent.

Fuel Economy Benefit: 4 percent

Equivalent Gasoline Savings: $0.11/gallon

Check & Replace Air Filters Regularly

Replacing a clogged air filter can improve your car's gas mileage by as much as 10 percent. Your car's air filter keeps impurities from damaging the inside of your engine. Not only will replacing a dirty air filter save gas, it will protect your engine.

Fuel Economy Benefit: up to 10 percent

Equivalent Gasoline Savings: up to $0.27/gallon

Keep Tires Properly Inflated

You can improve your gas mileage by around 3.3 percent by keeping your tires inflated to the proper pressure. Under-inflated tires can lower gas mileage by 0.4 percent for every 1 psi drop in pressure of all four tires. Properly inflated tires are safer and last longer.

Fuel Economy Benefit: up to 3 percent

Equivalent Gasoline Savings: up to $0.08/gallon

Use the Recommended Grade of Motor Oil

You can improve your gas mileage by 1–2 percent by using the manufacturer's recommended grade of motor oil. For example, using 10W-30 motor oil in an engine designed to use 5W-30 can lower your gas mileage by 1–2 percent. Using 5W-30 in an engine designed for 5W-20 can lower your gas mileage by 1–1.5 percent. Also, look for motor oil that says "Energy Conserving" on the API performance symbol to be sure it contains friction-reducing additives.

Fuel Economy Benefit: 1-2 percent

Equivalent Gasoline Savings: $0.03-$0.05/gallon

Note: Cost savings are based on an assumed fuel price of $2.68/gallon. Sources: www.fueleconomy.com; U.S. Department of Energy

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