NEW YORK — Growing global demand and supply constraints will push oil prices to $200 a barrel and gas prices to $7 a gallon within four years, forcing 10 million U.S. cars off the road, according to Jeff Rubin, chief economist at CIBC World Markets.
”Many of those in the exit lane will be low-income Americans from households earning less than $25,000 per year,“ Rubin said in a statement. ”At their current driving habits, filling up the tank will have risen from about 7 percent of their income to 20 percent, an increase that will see many start taking the bus.“
The rise of gas prices to an average of about $4.07 a gallon from $1.80 in 2004 is already forcing changes in Americans' car-buying habits. Car sales have dropped to about 14 million a year from 17 million in the first half of the decade, and will fall further to about 11 million a year by 2012, Rubin said.
Gasoline demand is also falling sharply in the face of record prices. Demand dropped 2.1 percent over the past four weeks on average compared to the same period a year ago, the Energy Department said earlier this week. Demand is headed for the first year-over-year decline in 17 years, and will continue falling as long as gas prices remain high, Rubin said.
By 2012, ”average miles driven will likely fall by as much as 15 percent, while the market share of light trucks, SUVs and vans will be literally halved,“ Rubin said.