Rural states hurt most in gasoline price spike

WASHINGTON (Reuters) - As U.S. gasoline prices head toward $3 a gallon, states with many drivers in rural areas would take the biggest financial hit if pump costs spiked to record levels again, according to a new report released on Wednesday.

Consumers in all states are dependent on oil for their transportation needs, but drivers in some states would have to spend a bigger share of their income on motor fuel and are more vulnerable to oil price shocks.

The national price for gasoline hit $2.79 a gallon this week, the highest level since October 2008, according to the Energy Department. The department's forecast arm expects the pump price to top $3 a gallon this spring and summer, as demand picks up and crude oil prices remain high.

The report, commissioned by the Natural Resources Defense Council, looked at the impact on drivers if U.S. gasoline costs spiked to the record levels seen in the summer of 2008, when the national pump price reached $4.11 a gallon for two weeks.

The five states that are most vulnerable to the higher fuel prices are Mississippi, Montana, Louisiana, Oklahoma and South Carolina. Drivers in Mississippi would have to spend 11 percent of their annual income, or about $3,345 on average, on gasoline if costs returned to $4 a gallon.

These states have fewer alternative transportation options to the family car and generally have lower income levels.

The five least vulnerable states are New York, Connecticut, Massachusetts, Maryland and New Hampshire, with drivers in New York paying just 4.3 percent, or about $2,037, of their income for the higher-priced fuel.

Most of these states have vast public transportation systems and commuter trains along with household incomes that are above the national average.

"In these difficult times, gasoline prices pinch more than usual, and rising gasoline prices could be a drag on economic recovery," the NRDC said in its report. "This reality reminds us that America's addiction to oil continues to threaten not only our national security and global environmental health, but also our economic strength."

The group said both state and federal governments should promote fuel efficient vehicles, cleaner-burning fuels and public transportation to lessen the impact of gasoline price spikes.

The NRDC also called on Congress to pass climate change legislation to cut U.S. carbon dioxide emissions. The transportation system accounts for about one-third of U.S. global warming pollution. However, passage of such a bill would have no short-term impact on fuel prices.

(Reporting by Tom Doggett; Editing by Lisa Shumaker)