Faced with $2.38 a gallon fuel, Michiganians are changing their lifestyles to compensate.
Gasoline prices across Michigan are higher than ever and are probably going to get worse before drivers can expect any long-awaited relief.
The statewide average for regular gasoline surged Monday to a record $2.377 a gallon, even though oil prices are on the decline and the 120 mph winds of Hurricane Dennis spared Gulf coast oil platforms and refineries.
Analysts say pump prices will probably increase a few cents in the weeks ahead - although nothing close to the spike drivers have endured this month - because retail gasoline prices haven't kept up with recent increases at the wholesale level.
Gas stations are charging an average of 10.6 cents more than last week and 45.3 cents more than this time last year, AAA Michigan reported. Over the weekend, drivers in some cities paid more than $2.50 a gallon.
But that didn't make Monday's prices any more tolerable for motorists such as Dave Montgomery of Southfield, who paid $2.40 a gallon to gas up his Ford Escape and says he can't cut back on his driving.
"Gas prices are ridiculous," said Montgomery, 52. "You gotta pay it; you gotta pay it."
Some Michiganians, however, are changing their lifestyles to compensate for high pump prices.
Grosse Ile resident John Armstrong is planning to trade in his Ford F-150 pickup for a smaller, more fuel-efficient Ford Escape gasoline-electric hybrid sport utility vehicle.
In the meantime, he's driving his wife's Volvo sedan, which gets about 30 miles per gallon.
"Driving a truck is killing me," Armstrong said as he filled the tank for $2.27 a gallon at the Costco station in Madison Heights.
Other drivers are reducing the number of unnecessary miles they put on their vehicles.
Sharon Sitarski of Roseville said she thinks twice before going long distances, and Pam Hennigh of Harrison Township isn't spending as much time vacationing near Houghton Lake as in past summers.
Still, tourism officials in northern Michigan say they're seeing plenty of visitors. Marilyn McFarland, executive director of the Mackinaw Area Visitors Bureau, expects that high gas prices could end up helping tourism because Michiganians will still take time off work but won't want to drive out of state.
"Do you go to Tennessee and make a 10-hour drive?" McFarland said. "Or do you drive four hours to Mackinaw City?"
Record gas prices act like a tax increase on consumers, said National City Bank chief economist Richard DeKaser. Most people don't significantly alter the amount of gas they use, leaving less money to spend on other products and services.
When prices rise on most goods, from milk and clothes to homes and college tuition, the extra money consumers pay stays within the United States.
But with oil, DeKaser said, because so much is imported, other nations benefit at the expense of this country.
Although Monday's prices surpassed records set April 8, they're still well below the inflation-adjusted highs of near $3 a gallon set in the early 1980s.
Experts don't expect pump prices nationally, which averaged $2.291 Monday, or in Michigan to go that high anytime soon. To reach $3 a gallon, oil prices would have to jump about $30 a barrel, or 50 percent, said Michael Burdette, senior analyst for the U.S. Energy Information Administration.
Crude oil futures fell below $59 a barrel Monday after topping $62 last week as Hurricane Dennis approached.
"I don't think we're within any kind of striking distance of $3 a gallon," Burdette said, "or even $2.50 at this point."
Drivers who use diesel aren't faring much better.
In past years, diesel usually cost less than regular gas in the summer, but on Monday the fuel used by truckers, farmers and construction workers cost about a dime a gallon more.
The statewide average for diesel was $2.47 a gallon, AAA said, a new record.
As diesel prices have risen, trucking companies such as Cannon Freight Systems in Mount Clemens have had to repeatedly bump up their fuel surcharge for customers.
Cannon, which has 130 trucks for deliveries throughout North America, charges 10 percent extra for fuel, up from 4 percent a few months ago.
That leaves customers frustrated, and ultimately could cause the price of products to rise.
But dispatch manager Paul Romanowski said the company can't absorb the amount gas prices have jumped.
"It costs more money to ship the products, and it costs drivers more of their income," Romanowski said. "It's just something that we have to do, because we can't do a load for free."
Soaring pump prices are maddening for gas station owners as well as for drivers.
Salim Jurayj, who owns a Citgo at M-53 and 32 Mile in Romeo, sees his profits decline as prices rise.
Many customers have been buying only a few dollars' worth of gas instead of filling up their tank, and more people use credit cards when gas prices are high, costing Jurayj about 7 cents a gallon in card-processing fees.
"That takes away your profit," he said, "and you're not making that much to begin with."
Drivers complained to Jurayj when prices rose above $2 a gallon earlier this year, but many seemed somewhat relieved when he reduced the price from $2.48 over the weekend to $2.40 Monday.
"If it were to drop today to $2.29," Jurayj said, "I think people would consider it a bargain."
You can reach Nick Bunkley at (313) 222-2293 or nbunkley@detnews.com.
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