Image: Gas Prices
Robin Loznak for msnbc.com
Marell Grable, left, watches as attendant Brian Lengstorf gasses up his pickup in Yoncalla, Ore., on March 23, 2011. The pricing sign at Jeremy McDaniel's gas station reads "OMG" and "@#!" . Station owner McDaniel put up the joke after the recent spike in gas and diesel prices.
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updated 4/11/2011 7:09:46 PM ET 2011-04-11T23:09:46

Soaring gas prices are starting to take a toll on American drivers.

Across the country, people are pumping less into the tank, reversing what had been a steady increase in demand for fuel. For five weeks in a row, they have bought less gas than they did a year ago.

Drivers bought about 2.4 million fewer gallons for the week of April 1, a 3.6 percent drop from last year, according to MasterCard SpendingPulse, which tracks the volume of gas sold at 140,000 service stations nationwide.

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The last time Americans cut back so much was in December, when snowstorms forced people to stay home.

Before the decline, demand was increasing for two months. Some analysts had expected the trend to continue because the economic recovery was picking up, adding 216,000 jobs in March.

"More people are going to work," said John Gamel, director of gasoline research for MasterCard. "That means more people are driving and they should be buying more gas."

Instead, about 70 percent of the nation's major gas-station chains say sales have fallen, according to a March survey by the Oil Price Information Service. More than half reported a drop of 3 percent or more — the sharpest since the summer of 2008, when gas soared past $4 a gallon. Now it's creeping toward $4 again.

Story: Price of gas continues to rise, now up to $3.76

People are still taking a hit, even as they conserve gas. That's because gas prices are going up faster than people are cutting back. Gas is 32 percent more expensive than it was in April 2010. In all, Americans are paying roughly $340 million more per day to fill up than they did a year ago.

Gas prices have shot up as unrest in North Africa and the Middle East rattled energy markets and increased global demand for crude oil squeezed supplies. A gallon of unleaded regular costs $3.77 on average, and only Wyoming has an average lower than $3.50. Gas is already 41 cents more expensive than at this point in 2008, when it peaked at $4.11 in July.

Most analysts are sticking to forecasts of a high of $4 a gallon, though some have predicted $5.

Across the country, some drivers are already hunting for cheaper gas, sometimes with the help of a mobile phone app. Others are checking out bus and train schedules, reconsidering mass transportation, or trading in their SUVs for more fuel-efficient models.

Kim Cramer, who works for Radio Flyer in Chicago, has started walking and carpooling more. She's also learned to be choosy, buying gas in suburbs, where she's learned she can save as much as 20 cents a gallon.

"I try to fill up anywhere besides the city," she said.

About two and a half days' worth of Whitney Shaw's pay each month goes just to fill up her 2001 Hyundai Accent. The administrative assistant is thinking about taking the bus for her daily commute, 50 miles each way between Branford, Conn., and Hartford.

"It's three hours of pay from work just to fill up my tank even once, so I'm definitely feeling it," Shaw said while filling up for $3.61 a gallon at a Valero station on the Berlin Turnpike.

Americans also appear to be turning to smaller, more fuel-efficient cars. Sales of the Hyundai Sonata and Elantra soared 55 percent in March. Meanwhile, sales of Chevy's Suburban SUV dropped nearly 24 percent.

The decline is somewhat puzzling because Americans typically curb their driving only as a last resort, after sacrificing other forms of discretionary spending, like shopping for new clothes, or going to movies, concerts and restaurants.

But demand for gas is falling while other types of spending are on the rise. Retail sales rose 2 percent in March compared with a year earlier, surprising economists who were expecting no increase or even a decline.

Gamel said it's too early to tell whether this is the kind of long-term decline in demand that the economy endured during the recession. Prices already are in the range when Americans started to leave their cars in the driveway several years ago. Drivers began to cut back on gas in October 2007, when the national average approached $3 per gallon.

Even if demand for gas keeps falling in the U.S., it probably won't be enough to force the price down. That's because worldwide demand for crude oil keeps rising.

How much a gallon? A look back at spiking gas prices

Global demand for oil is about 87 million barrels per day, matching its peak from 2007. It is expected to grow to more than 88 million barrels a day by year's end, with most of the increase coming from China. At the same time, supply is shrinking because of uprisings in Libya and elsewhere in the Middle East.

In the United States, people are watching their local gas stations a little more carefully. Some are even getting rid of their old gas-guzzler.

Andrea Meyer of Manteno, Ill., has done both. She buys gas in the middle of the week because prices seem to jump over the weekend. And she recently sold her 2005 Chevy Envoy SUV and bought a 2011 Chevy Cruze, which gets 30 miles per gallon. She still spent about $200 on gas for the new car from mid-February to mid-March.

"I won't go hungry tomorrow," she says. "It's just taking away from me getting ahead faster. It throws off everything. It immediately makes you reprioritize."

Copyright 2011 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.

Video: Gas prices hit budget-busting highs

  1. Closed captioning of: Gas prices hit budget-busting highs

    >>> good evening. if you filled up or have take-up on a few gallons in the last few days, you know where gas prices are, but you might be surprised to lunch the reason behind the spikes in prices. yes, a lot of oil producing states are undergoing revolts with varying degrees of violence. there's something else at work. with the nation cloaverage close to $4, fewer people are driving fewer miles bah they just can't pay the freight to drive at this price. kristen starts us off in southern california . good evening.

    >> reporter: good evening, brian. prices like these are becoming the norm here in california. more than $4 a gallon for regular unleaded. and that's impacting drivers and just about everyone else. sky high gas prices in the mile hp high city are causing painful cuts at the senior resource center. last year, they gave 150,000 rides to see a doctorory go food shopping.

    >> it's going to have an impact on the ridership. we're going to have to look at consolidating trips.

    >> the average for a gallon of unleaded is $3.77. that's 91 cents higher than this time last year. among the cities with the steepest prices, san francisco , chicago, and new york. among the lowest, tucson, arizona.

    >> the current price is the most we paid for this time of year ever. however, we're still about 40 cents away from the all-time record highs.

    >> analysts say unrest in north africa and the middle east is a contributing factor but not the rain reason.

    >> the value of the dollar has fallen precipitately, and because the u.s. pays for the oil in u.s. dollars , it hurts.

    >> they also say it's due to taxes, the oil refinery problems, and the blend.

    >> this is getting ridiculous.

    >> i guess you have to change your lifestyle until it passes.

    >> lesdz activities. just go to work, go home.

    >> in fact, gas sales have fallen for five straight weeks, attributed to the high prices. more people are taking public transportation , shopping around for the least expensive prices and buying fuel efficient cars. still, for this woman who owns a dog grooming shop in los angeles , $4.40 a gallon hurts.

    >> it's going to be a hard to keep all my clients.

    >> one more bump on an already rocky economic road. and analysts say it's likely the prices will continue to go up as the summer travel season approaches.

    >> consisten in california tonight. kristen,

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Data: Latest rates in the US

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Home equity type Today +/- Chart
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