Jeremy Hobson: Oil is trading around $106 a barrel in New York this morning. The national average for a gallon of gasoline Is about $3.80. Compare that to the peak of prices back in the summer of 2008. Oil prices were much higher -- about $145 a barrel. Gas prices were only slightly higher.
For more on all this -- and how consumers are reacting -- let's bring in LA Times Consumer Columnist David Lazarus. Good morning.
David Lazarus: Good morning Jeremy.
Hobson: So is there a difference between the way that consumers reacted to high gas prices back in 2008 and the way that they're reacting today?
Lazarus: There's a big difference. Back in 2008, we didn't really see a big drop-off in driving. We did see use of public transportation going up, but I don't think the roads were any less congested at that time. Whereas now, we are actually seeing gas sales going down. They're down for the past five weeks. And the indication is that as gas prices keep going up, consumers will keep stepping back.
Hobson: And why is that happening this time?
Lazarus: I would say it's because the recession is still fresh in people's minds. The wounds are still fresh and people remember what it's like to have a cash crunch. And so they're trying to get ahead of the curve by looking for ways to economize in advance. Now it's interesting because retail sales are still up; people are not cutting back across the board but they are cutting back on their driving.
Hobson: So people are actually going to the stores more now, but they're spending less on gas?
Lazarus: Yeah, but it's a little more complicated. I think we can assume that people are carpooling, I think we can assume people are using public transit more. But I think we also have more fuel-efficient vehicles on the road right now. Back in 2008, there were probably more Hummers and more Escalades and more things like that around. Now we're seeing a lot more hybrids on the loose. That also is having a big impact on gas sales.
Hobson: People are actually going out and buying hybrids and Volts and all that stuff?
Lazarus: They are doing that. And yet, public transportation is a very strong-going concern. I think this is a real opportunity for transit operators around the country to try and offer an alternative to driving that is realistic and practical and convenient and yet, transit operators nationwide are cutting back on service even as gas prices head north.
Hobson: L.A. Times consumer columnist David Lazarus. Thanks so much.
Lazarus: Thank you.