As $4 Gas Nears, Americans Driving Less

If you missed it on the way to work this morning — and for some reason didn’t drive this holiday weekend — the price of gas is at another new high: $3.94 a gallon nationally. As you can plainly see, that’s really close to $4. It’s up 7 cents since we last talked about it Friday.

The Department of Transportation said Monday that in March — when gas prices were still a reasonable $3.50 — Americans drove 11 billion fewer miles than the year before. That’s a big number. Divide that by a 25-mpg average fuel economy — we’re just picking that number as an average — and that’s 440 million fewer gallons of gas used, or about the average daily consumption of gas in the U.S. 

That might not sound like a lot, but it should be enough to significantly lower demand for gas. That’s one of those factors that should lower gas prices, yet we keep seeing them go up. The Detroit News tries to explain what makes up the price of a gallon, but even its attempt falls short of answering the question fully.

Record gas prices: 20 straight days (CNNMoney.com)