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Struggling Drivers Blame Washington for High Gas Prices

Lack of effective energy policy tops consumers' complaint list

June 30, 2008

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We know from a previous survey that Americans are angry about high fuel prices. Now, a new survey tells us who gets the blame: Washington.

The latest Auto Pulse Survey conducted by the Consumer Reports National Research Center shows more than three quarters of consumers singling out the government's failure to implement an effective energy policy as a root cause for high gas prices, with many also blaming oil companies and foreign oil producers.

The survey also shows a critical tipping point for motorists has been crossed, with another lifestyle-changing milestone just around the corner.

Gas prices have climbed 38 percent in recent months, from $2.96 per gallon, on February 11, 2008, to $4.08 on June 23, according to data from the Energy Information Administration.

The Consumer Reports' survey found that in addition to the federal government, 75 percent of Americans feel oil companies, 70 percent blame foreign oil producers, and 68 percent blame the Middle East conflict.

Consumer Reports also asked what actions the federal government could take to reduce fuel costs:

• 90% Increase support for alternative energy development
• 84% Negotiate lower prices with oil-exporting nations
• 83% Encourage conservation through tax incentives, alternative transportation
• 81% Allow more drilling in the U.S. and offshore

A new tipping point

In the 2007 Auto Pulse survey on gas prices, Consumer Reports found the tipping point at which motorists said they would drastically reduce driving would be $3.50. And they have. Year-to-date, 20 billion fewer miles have been traveled compared to 2007 for the same period, according to the Department of Transportation.

Responses to this latest Auto Pulse survey show a median price of $4.32 per gallon as the new tipping point that would lead them to reduce their driving even further. This marks a much narrower margin between national average prices and the median tipping point than in last year's survey, signaling that consumers now have less flexibility in their budgets.

Americans feel impact

Consumer Reports found high gas prices are not only forcing consumers to cut back on driving, vacations, and entertainment spending, but to struggle with essentials like food and health-care costs. Households with less than $40,000 annual income are being especially hard hit.

Forty-five percent of respondents have been putting less money into savings accounts; 24 percent have cut back on essentials like food or healthcare; and 17 percent have charged more expenses on credit cards-all troubling trends. Many drivers also made changes in their transportation patterns to save money, including:

• 31% Walked or bicycled more
• 24% Carpooled more
• 18% Worked from home
• 16% Used public transportation more
• 10% Moved closer to work

Car buyers shift focus

When it comes to choosing a new car, 31 percent of new-car shoppers identified fuel economy as the most important consideration, nearly double the share recorded in 2007.

While nearly 80 percent of car shoppers want better fuel economy, 69 percent still want a same-sized or larger vehicle. That said, literally no one wanted a much-larger vehicle, suggesting automakers face an immense challenge getting new customers into full-sized pickup trucks and SUVs.

Compared against last year's survey, CR found motorists are more interested in alternative engine types (80% vs. 47%). Among those planning to purchase a new car, 37 percent (vs. 24% in 2007) are considering a flex-fuel vehicle; 32 percent a hybrid (vs. 28%); and 30 percent a diesel (vs. 11%).

Ultimately, most drivers could make some compromise to improve fuel economy. What drivers would do to reduce amount spent on fuel:

• 54% Pay extra for more efficient vehicle
• 49% Compromise on size or capacity
• 38% Compromise on amenities or comfort
• 31% Compromise on performance
• 15% Compromise on safety.

More than one quarter of consumers have considered the ultimate vehicle downsize -- giving up two wheels. Among them, 18 percent have contemplated a motorcycle and 14 percent were drawn to motor scooters. Men and respondents, aged 18-34, were most fond of this alternative.

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