Once the prices at his local Amoco station shot above $2.11 this week, Adam Steel’s long love affair with his gas-guzzling Ford Explorer abruptly ended.
“It’s over. I’ve completely had it with this stupid car. It’s sending me into bankruptcy,” Steel said Friday as he backed it into Sierra Auto’s used-car lot at 3833 N. Western Ave., hoping to sell it and instead buy a fuel-thrifty Geo Metro.
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“I tried to hold on: driving less, buying the cheap stuff,” said Steel, a full-time student at DeVry Institute of Technology, who now pays $36 each time he fills his tank. “But once I saw gas at $2, it drove me over the edge.”
High gas prices are nothing new, having edged steadily upward for almost a year. But the passing of the $2 milestone has jolted many across Chicago into radically rethinking –at least for now–how they travel.
On Friday, a gallon of regular unleaded gasoline in the six-county region averaged $1.85, up 28.3 cents from last month. A driver would have to go to Hawaii to find higher averages. But prices as high as $2.17 for regular are popping up in several city gas stations.
Marketing experts are confident that after a short adjustment period, most drivers will shrug off the new prices and ride on undeterred in their SUVs and mini-vans.
But people like Mary Merker and Linda Hammond are redefining their lives around the new prices.
Merker, who lives in Logan Square, used to drive as far as Aurora and Elgin to find work as an agency nurse. Now she struggles to find hospitals close to home.
Unbearable fuel costs forced Hammond to quit her job as a traveling house cleaner this month. To cut costs, she’ll start work Tuesday at a factory near her home in Wonder Lake.
“I just can’t afford to travel from house to house anymore,” she said. “I had to find a job where I could make just one trip to and from home.”
Public transportation around Chicago has experienced record increases in ridership, partly because all the new employees finding jobs in the area’s booming economy cannot afford to drive to work and hold onto their paychecks, said CTA spokeswoman Maria Toscano.
The Pace bus system, which serves Chicago’s suburbs, even launched an ad campaign last month, trying to lure more disgruntled drivers onto its bus system.
Just how high prices are headed also is a key question for the 34.4 million Americans expected to drive long distances this Memorial Day weekend.
“I’m sad that the one year we decide to take a long car trip, the gas prices go crazy,” Mary Bresnahan of Chicago said as she filled her 1999 Buick Regal in Oak Lawn and thought about her family’s upcoming two-week road trip through New England.
Stoking customer fears is the fact that the price rise shows no signs of stopping. Many experts expect the figure to reach $2.50 by summer.
Along with the seasonal increase in demand, crude oil prices are rapidly fluctuating because of uncertainty about a June 1 meeting of the Organization of Petroleum Exporting Countries, which controls about 55 percent of the oil that the U.S. consumes, said Charles Allen of the AAA-Chicago Motor Club.
Adding to Illinois woes, he said, are high state taxes and the new U.S. Environmental Protection Agency regulations for more expensive reformulated gasoline that took effect May 1 for the six-county region.
“When you think about $1.98 a gallon, it doesn’t seem that bad,” said Cary resident Barb Coleman as she filled up her mini-van Friday morning. “But passing $2 a gallon is a bold move.”
However, gas stations should worry little that their glaring new prices will scare off customers permanently.
According to marketing experts, motorists are a malleable group of consumers who will quickly adjust once they get past certain barriers. Consumers have reference prices in their minds, a price they assume to pay for certain products, such as 75 cents for a can of pop from a vending machine.
When a price goes beyond what they expected, consumers will squirm but readjust their reference point and wait for the next threshold, said Pradeep Chintagunta, a professor of marketing at the University of Chicago’s graduate school of business.
“The question is how long does it take for you to adjust to that?” Chintagunta said. “If people have been used to prices being relatively stable, it will take longer for them to adjust. If prices have been moving anyway, as with gasoline, it’s more likely they are willing to revise their reference prices quickly.”
There also is evidence that consumers process numbers from left to right, which makes two bucks for a gallon of gasoline seem so much more than $1.84.
“If you notice in grocery stores, they keep prices at $1.99 because psychologically, they feel if they crossed $1.99 to $2, it’s like a big loss to consumers,” Chintagunta said.
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But there have been forms of protest.
At Rand & Central Shell in Mt. Prospect, cashier Ross Tahov put up homemade signs on the pumps informing customers that they must now pre-pay for gas. The notices went up a few days after he chased someone down who drove off without paying. Tahov, who was on foot, caught the man whose escape was thwarted by a red light.
“They say we have to expect it because everybody’s angry about these prices,” Tahov said.