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Pain At The Pump

It's getting painful at the pump. Just as Americans are buying more big, gas-guzzling SUVs, gas prices nationwide have shot up nearly 9 cents a gallon in just the past two weeks. The price is up 14 cents a gallon in the Midwest, CBS News Correspondent Jerry Bowen reports.

In Chicago, consumers are feeling it.

"It's tough not to notice it. The impact is pretty clear. Less of my money, more for them. It's just bad news all around," said one man.

"It's definitely gonna make me think about driving - driving less and taking public transportation more," said another motorist.

The price hikes began when OPEC members pledged to cut production by 2 million barrels a day. On Tuesday, a 2.1 million barrel-a-day cutback extending more than a year was given final approval at an OPEC meeting in Vienna. The cutback move was led by Saudi Arabia and Iran, countries troubled by mounting debt and domestic unrest.

Retailers boosted prices in anticipation of crude-oil price hikes, but higher energy costs don't necessarily mean higher inflation.
"The expectations for inflation are fairly moribund in that this rise in oil prices is likely to contribute less than one percent inflation growth from what we've been seeing," said Michael Rothman, senior energy analyst at Merrill Lynch.

The increases follow a decline in gas prices that began in September of 1997. Prices fell 34 cents a gallon for regular, before bottoming out last month. Now motorists are confronted by the largest and fastest price hike since 1990, when Iraq invaded Kuwait.

Still, nationwide, the cost of a gallon of gas is 24 cents cheaper than the day prices started crashing back in 1997. But not for long. The forecast is for rising prices and more pain at the pump.

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