Gas guzzlers choking on the $2 gallon

www.dailytelegraph.co.uk By Simon English in New York  (Filed: 26/02/2003)

New York motorists are furious that petrol prices have risen above $2 a gallon in the city and are accusing the oil industry of profiteering from the Iraq crisis. 

Gas gripe: New Yorkers pay about 34p a litre for petrol - an 'absurd' price, said one

The American Automobile Association claims the price rises have little to do with a change in the costs to big oil companies, which it says are exploiting "fear and speculation".

At $2.04 for a US gallon of regular unleaded, New Yorkers are paying 53 cents a litre, or 34p, compared with about 77p charged in Britain.

Yesterday's New York Post claimed in a front page headline that motorists are being "hosed", while interviewees described the cost of petrol as "absurd", "crazy" and "price gouging". Across America, petrol prices are at the highest since June 2001, rising by more than 50 cents since the start of the year.

Oil companies say a strike in Venezuela and higher crude oil prices are responsible for the strife of the American motorist and warn that further bad news is likely if a war begins. Rising fuel costs are just one factor behind a slump in the confidence of US consumers, who account for two thirds of all spending in the world's largest economy.

Figures from the Conference Board yesterday show that confidence is near a 10-year low, with the consumer sentiment index falling to 64 in February from 78.8 in January. Conference Board director Lynn Franco said the readings "paint a gloomy picture", suggesting little prospect of an improvement in the economy.

By early afternoon in New York the Dow Jones had lost another 74 points to 7784.