Gas prices dip, but U.S. drivers wary

PHOENIX (Reuters) - Pumping gas into his hefty Landrover Discovery, Aaron Horton is pleased that U.S. gas prices have fallen to near $2 at the pumps -- but it's not going to change his life.

"If gas is cheaper, I appreciate it ... I guess I can just eat a bit better," said Horton, 29, who drives 400 miles a week for his job as a personal fitness trainer in sprawling Phoenix. "I don't know that I'd call it savings, it's just not burying me as much as it was."

The average U.S. retail price for gasoline dipped to $2.07 a gallon last week, down from a high of $4.11 in July and the lowest since March 2005, but Americans are not exactly celebrating or returning to the roads in droves.

With the economy shedding around 200,000 jobs a month and a deepening housing and financial crisis, other factors are offsetting their savings at the pumps, drivers said in interviews around the country.

"In this economy these prices are a drop in the ocean -- too little," said construction worker Mario Alvarez as he sluiced gas into his Toyota Tacoma truck in downtown Los Angeles, where prices dipped to $2.36 a gallon from highs of over $4.50 in July.

"I have work now, but tomorrow I may not. A few hundred bucks I save now aren't going to see me through that," he added.

In the Midwest, which had the lowest regional gas prices in the country last week at an average of $1.94 per gallon, drivers were also less than thrilled.

"If I was a long-haul trucker driver, maybe it would matter, but if I'm saving 8, 9, 10 dollars that's not significant," said bartender Murray Donovan, 53, who drives a white Buick sedan in Cincinnati.

Some gas station managers were also sanguine, saying lower prices had done little to boost sales as consumers remain cautious.

"It hasn't helped us," said Harold Haywood, manager of a Kansas City, Mo., Quik Trip gas and food store. Haywood said sales remained lower than last year and were flat compared to three months ago when prices were more than $3 a gallon.

Part of the sluggish sales are due to a turn to cold weather and decreased recreational travel, he said, and part of the trend was due to people having less money to spend.

LIMITED RELIEF

In September, the number of miles driven by Americans tumbled 4.4 percent from a year earlier, the government said this week, but despite the pessimism, there were signs that some people are starting to return to the roads.

Demand for gasoline edged up 1.3 percent in early November as fuel prices dropped, according to a survey by MasterCard Advisors, although it was still down 3.9 percent on year-earlier levels.

In the area around Houston -- the Texan city which noted the nation's lowest prices this week at $1.84 a gallon -- some stations reported a bounce at the pumps as drivers took out the thirsty trucks and sport utility vehicles they left at home when gas prices peaked in the summer.

"A lot of people are buying gas right now. People left their big trucks at home ... for about six months ... but now everyone is driving a big SUV because everyone can afford $2 gas," said Bobby Gill, the manager of a Shell service station in League City, south of Houston.

Some drivers said lower prices would allow them to take trips they had put off.

"It's great. I'm moving to Boston next week and my husband and I are going to drive there," said homemaker Carolyn Bridges, 33, as she filled up her Toyota Celica in Los Angeles. "We have always wanted to do it and now the gas prices are low enough."

In Scottsdale, Arizona, house painter Brock Lang, 23, said falling prices since the summer had allowed him to plan a 400-mile (640-km) road trip to San Diego, California, to celebrate the Thanksgiving holiday next week.

"It's great .... It's something I would definitely have thought twice about when gas prices were higher," he said, pumping gas into Pontiac Grand Prix sedan.

And for some drivers, it was the journey they didn't have to make.

During the summer months when prices were above $4 a gallon, Arizona-border town resident Jesse Flores braved the threat of drug cartel violence to cross to Mexico to fill his thirsty 2004 Ford Expedition, saving himself up to $60 a week.

"Now gasoline prices have started going down I'm filling up over here," said Flores, who works construction. "It's getting kind of wild over there right now."

(Reporting by Tim Gaynor; Additional reporting by Syantani Chatterjee in Los Angeles, Andrea Hopkins in Cincinnati and Carey Gillam in Kansas City; Editing by Eddie Evans)