Home > News Room > TEA in the News > How much higher will gasoline prices rise until drivers change their habits? - Global News

How much higher will gasoline prices rise until drivers change their habits? - Global News

April 3, 2012
David Shum
Global News

High gasoline prices across the country are making drivers think twice about where they travel, how often to do it and whether or not it's even worth it to own a vehicle or trade it in for more fuel-efficient or hybrid/electric cars.

"There's an increasing number of people realizing high personal and societal cost of car culture," said Franz Hartmann, Executive Director of the Toronto Environmental Alliance. "It costs a lot of money to own and operate a car and in many places, the so called convenience is out-stripped by the challenges."

Gas prices in Canada are inching higher coast-to-coast as the busy summer travel season nears.

In Toronto alone, the price of gas is expected to move up 4.5 cents overnight to 140.1 cents per litre, making it a little more painful on the wallet each time drivers hit the road.

According to the Canadian Automobile Association, the average annual cost of owning a passenger vehicle (including insurance, depreciation, financing and fuel with 18,000 km driving annually) was approximately $12,000 in 2011. These numbers may be higher in Ontario where drivers pay substantially more in insurance costs.

With driving costing more and more, how much higher will the price of gas have to reach before drivers start changing their habits?

Jason Parent from The Kent Group, who tracks performance data and analysis relating to the petroleum industry, says it all depends on the individual and thus far, there's no huge incentive to switch over from gas guzzlers to hybrid/electric vehicles.

"The reality is the payoff on what you'd pay for a hybrid vehicle, you don't get that back on fuel, at least in the short term," he said.

And the most recent numbers of vehicles sold in Canada in the past decade seems to prove that point.

According to DesRosiers Consultants Inc., Canadians in the past 12 years have purchased a total of 17,000 hybrid/electric vehicles. In that same period, more than 22 million gas-powered vehicles were sold.

Ryerson University economics professor Eric Kam believes Canadians are stuck in a driving culture regardless if gasoline prices hit a certain threshold.

"There's no evidence of a breaking point where when prices are too high, demand will fall," Kam said. "When gasoline prices hit $1-a-litre, there was no rush to stop buying gas powered cars."

However, skyrocketing gasoline prices may change some minds, especially those who want to save some cash.

"People may think twice before making that extra trip, but people will not stop car pooling or even stop driving to work." said Kam.

Still, automobile experts say changing driving habits depends greatly on individual circumstances, family income and the accessibility of public transportation.

What many people can't change is the price of gas and there's no way of knowing how much higher it will go.

To help cut down on driving costs, the Canadian Automobile Association has some tips on how drivers can save on fuel consumption. Also, there's a Canadian list of the most fuel efficient vehicles for Model Year 2012. Both documents can be found below.

SOUND-OFF: With gasoline prices inching higher across the country, at what price point will you decide to change your driving habits? $1.50 per-litre? $1.75 per-litre? Let us know what you think by sending your comments on our Facebook page.

As originally published here:

2012-04-03 How much higher will gasoline prices rise until drivers change their habits (Global).pdf19.84 KB