Ugh. We all knew it was coming. But that doesn’t make its arrival any easier on American wallets.
Say hello to the $4 gallon of gas, coming to an Army and Air Force Exchange Service pump near you, just in time for Memorial Day weekend.
Each gas price increase and record-breaking oil price brings consternation to drivers. But where does the buck stop on pricey fuel, and what amount will make American drivers alter their driving habits?
Nearly three months ago, Stars and Stripes posed the question to U.S. motorists in Europe. The consensus seemed to be that $4 a gallon was too much. Now that the lowest grade of fuel sold at AAFES stations in Europe has reached that level, will people change their driving habits?
Airman 1st Class LaFayette Workman of the 100th Services Squadron at RAF Mildenhall, England, was shocked when told Thursday that the new high was coming.
Workman said he usually just "fills it up and goes." But add another buck, and his outlook will change, he said.
"Five dollars (per gallon) is way too much," he said. "I’d be [ticked off] about $5 a gallon."
Rising gas prices have already led Workman to take the train or a taxi whenever possible, and that will only increase once a gallon costs a fiver.
"I’ll be on the train ASAP," he said of the $5 mark, while recalling the prices of his youth. "As a kid, gas was 99 cents a gallon."
Shelly Reynolds, whose husband is stationed at nearby RAF Lakenheath, agreed that $5 a gallon would be an unacceptable threshold to cross.
"Everything’s so far apart that you’ve got to drive everywhere" in England, she said.
A common refrain Thursday was a resigned, "What are you going to do?"
"I feel as though we’ve already been affected," said Lori Johnson, who lives on base at Mildenhall with her Air Force husband and children.
Rising prices have forced her family to curtail shorter driving trips and save fuel for longer drives.
Now, the family walks or uses other means to cover short distances.
They also traded in their Chevy Suburban for a more fuel-efficient Volvo, she said.
"It’s something we have to live with," she said.
Petty Officer 2nd Class Dohnnie Gage, who lives on the Navy Support Site in Gricignano, Italy and works on Capodichino — a round trip of about 40 miles — said he’s about to reach his limit.
"If the 100-liter coupon books go past $115, then I will start using the shuttle bus," Gage said.
As of May 1, a book of fuel coupons in Naples sells for $111, breaching the $4-per-gallon mark.
At that price, Petty Officer 2nd Class Husniyah McNeill has already reached her limit.
"It’s way too expensive now," McNeill said as she got off the shuttle bus Wednesday morning. She, too, lives on the Support Site, and works on Capodichino.
"It was pretty expensive when I first got to Naples (last August). But then it was only about $98 for 100 liters."
And guess what? It just might get worse.
On Tuesday, Robert Hirsch, senior energy adviser for Management Information Services, an economic research firm, told CNBC’s "Squawk Box" that gas could hit $12 to $15 a gallon in the next few years as demand rises and supply dwindles, among other reasons.
"The prices that we’re paying at the pump today are, I think, going to be ‘the good old days,’ " he said.
Stars and Stripes reporter Lisa Novak contributed to this report.
Stateside rates, cost of delivery cited in latest AAFES milestone
A rise in stateside gas prices, coupled with an increase in the cost of delivering fuel to motorists in Europe, has driven AAFES’ pump prices for regular unleaded past the $4 mark for the first time.
Normally, changes at the Army and Air Force Exchange Service’s pumps mirror changes in the U.S. national average, which jumped 6.9 cents a gallon last week.
However, AAFES’ prices climbed an additional 4 cents a gallon because of an increase in the exchange’s dispensing costs.
Thanks to that 4-cent increase, the cost of regular unleaded will rise 11.1 cents a gallon to $4 when the new prices take effect at 12:01 a.m. Saturday, according to an AAFES news release.
Lt. Col. David Konop, spokesman for AAFES in Europe, announced the increase in dispensing costs last week. The exchange blames a stronger euro for driving up the costs of personnel running the coupon program and other expenses, all of which are figured into those dispensing costs.
Adjustments to AAFES’ dispensing costs are made once a year based on the previous year’s expenses. Beginning on Saturday, those costs will add 4.2 cents per gallon in Germany, 3.5 cents in the United Kingdom and 2.8 cents in the Netherlands.
Now that prices have passed the $4 threshold, can $5 a gallon for unleaded be in the near future?
If you live in the Netherlands, it’s looking more likely.
Even though AAFES is selling gasoline at floor prices there, a gallon of mid-grade unleaded will climb 7 cents a gallon to $4.551 on Saturday. At floor prices, AAFES sells fuel at the cost it pays plus its distribution costs.
Premium unleaded will be $4.85 a gallon in the Netherlands, a bargain compared to what drivers of diesel cars are paying. Diesel prices in the Netherlands will jump 21.6 cents a gallon to $5.312 on Saturday.
Gas prices topped $4 a gallon in the Netherlands in mid-March.
