How Summer's Rapidly Rising Gas Prices Could Affect You

Gas prices on the Massachusetts Turnpike almost exactly a year ago. Bad old days are here again. (Flickr/Svadilfari)

The Los Angeles Times headline says "Gasoline Price Surge Comes at Bad Time."

Sez you.

Gasoline prices are headed north at the fastest clip ever recorded, so fast that economists are saying it could imperil the economic recovery. Nobody wants that. But there is more than one way of looking at this phenomenon. The environmental economy, also known as the survival of our planet, will be imperiled if we can't get the electric vehicle (EV) revolution off the ground and gas-guzzlers off the road. And the only thing that will definitively kill that transition is low gas prices.

Last summer, $4 a gallon gas delivered a nearly instant, almost mortal blow to SUV sales. When the price plunged to $2, there was a small but noticeable shift back to bigger vehicles, but the sales figures were complicated by the huge discounts the retailers put on their big boat-anchor trucks. People were feeling pretty desperate at the time, as this amusing video makes clear:

Now, just as the summer driving season is getting underway, prices are way up again, rising more than 17 cents in the last two weeks. The national average on Friday was $2.66 a gallon, and I saw $2.80 all over the place today. In San Francisco and some other places in California, it's over $3 already. This is just the way it happened last year.

There's no particular reason for prices to soar right now: analysts are somewhat baffled, because there's neither a big recovery stoking demand or a supply crisis.

I'm not just speculating about how consumers are likely to behave. A recent Kelley Blue Book study shows that 87% of new-car buyers expect gas prices to rise sharply, and more than 60% say that rising gas prices "have either caused them to change their minds or made them think about vehicles they normally wouldn't have considered." They also said they might go from a V-6 to a four-cylinder engine, or from a large sedan to a mid-sized one. And 73% said they "plan to change their spending habits if gas prices were to go much higher."

So gas prices are a big driver, and people won't seriously consider buying green cars in any numbers (early adopters will always go for them) unless they need relief at the pumps. Unfortunately, gas prices fluctuate so much they send consumers on a wild ride, not sure what to buy. And sometimes that means they just stick with the guzzler in the garage.