Fuel costs climb, hits record level image

Hawaii is the first state in the nation to average $4-a-gallon for regular gasoline, according to the AAA Fuel Gauge Report.

That’s about 90 cents more than a year ago and $2,2 more than 2008! And looks like the nationwide medium price may hit this level soon.

For truckers, the diesel increase is a counterpunch to what have been profitable signs of economic recovery.

“We’re the first to see signs of a revived economy, and we’ve been busy lately,” said Mike Riggan, president of TanTara Transportation of Muscatine, which runs 45 flatbed trucks in 45 states.

Moreover, average household spending on gasoline is likely to reach a record $2,800 this year, the Consumer Federation of America said Wednesday. This is comparable with the average household’s annual health care budget and $700 less than it spends on groceries, the group said.

Concern about gas prices and support for higher fuel economy was especially strong among middle-class families with incomes of $25,000 to $75,000. In this group, 84 percent expressed great concern about gas prices, and 70 percent supported a 60 mpg fuel economy standard.

“The great concern about gas prices reflects not just rising prices and political instability in the Middle East, but also adverse impacts on household budgets,” said Stephen Brobeck, CFA’s Executive Director. “Low- and middle-income Americans are now spending more money each month on gasoline than on their car payments,” he added.

Forecasting firm IHS Global Insight says its modeling shows consumers curtail their driving once gas prices pass $4 a gallon.

For example, in Florida, where tourism is the biggest industry, businesses are counting on a strong spring-break season. Tourism spending in 2008 and 2009 dropped by a combined $4.6 billion, or 7 percent. State sales tax revenues collected from tourism fell by $200 million, or 5.1 percent, in 2009.

The national average is $3.558 a gallon, up from $3.509 a week ago.

Gas would have to cost $7 a gallon for hybrids to break even

While there are plenty of environmental (and political) reasons to buy a hybrid car, money isn’t one of them — at least for now. A study by CarGurus showed that gas would have to top $7 a gallon to make most hybrids the economical choice.

Hybrids command, on average, a 17-percent markup over their standard-powertrain counterparts, which stunts their economy at the pump.

“There are some good reasons to buy a hybrid, but saving money is not one of them,” said Langley Steinert, CEO of CarGurus. “Consumers should know that the premiums they will pay to purchase most hybrids far exceed any costs saved at the pump, even as gas prices climb.”

It’s true that the large majority of people buying hybrids are looking to save money but sadly, it’s often the case that they would be better off buying a regular model or even a diesel.

Image credit: GETTY IMAGES