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As gas went up, U.S. cut down by 3 percent in the past year
Question of the Day
Americans have pumped less gas every week for the past year.
During those 52 weeks, gasoline consumption dropped by 4.2 billion gallons, or 3 percent, according to MasterCard SpendingPulse. The decline is longer than a 51-week slide during the recession.
The main reason: higher gas prices. The national average for a gallon of gas is $3.89, the highest ever for this time of year, and experts say the average could be $4.25 by late April. As a result, Americans are taking fewer trips to restaurants and shopping malls. When they take a vacation, they’re staying closer to home.
But the decline in gas consumption is also a sign that efforts to push carmakers to produce vehicles with better gas mileage are paying off. The average new car now gets nearly 24 miles to the gallon, compared with about 20 mpg just four years ago, according to the University of Michigan Transportation Research Institute.
“I’d expect to see lower gasoline consumption for several years to come,” Rice University energy expert Ken Medlock says.
Americans have cut back on fill-ups for extended periods before. In 2008, gas spiked from $3.04 to $4.11 per gallon in seven months. It wasn’t until January 2009, when the national average for gas had dropped to $1.86 that consumption increased. Drivers bought more gasoline for 23 weeks in a row.
“The spike in 2008 was a real shock to the system,” Mr. Medlock said. “There’s still a residual impact on people’s driving behavior.”
There were other stretches of reduced gas use, notably two in the 1970s and one in the early 1980s. But in those decades, Americans eventually went back to driving big cars and trucks that guzzled gas.
This time may be different. Mr. Medlock thinks economic growth will be too modest and gas prices will stay too high for Americans to start driving more frequently anytime soon. Economists expect the U.S. economy to grow 2.5 percent in 2012. The government estimates that gas will average a record $3.79 per gallon for the year.
John Gamel, who oversees MasterCard SpendingPulse’s weekly consumption report, points to rising sales of fuel-efficient vehicles.
“People have gotten used to elevated prices and they’ve made their long-term purchases,” Mr. Gamel said. “They’re going to be using less fuel.”
Consumers now care more if a car gets good gas mileage than if it’s reliable, stylish or comes with a great deal, according to a survey of more than 24,000 new-vehicle owners taken last summer and fall by J.D. Power and Associates. That wasn’t the case in the nine previous years that J.D. Power conducted the survey.
Automakers have listened to consumers, and responded to stricter government fuel economy requirements. They’ve improved engines and transmissions so cars burn less fuel. They’ve also made cars more aerodynamic, boosting mileage by cutting wind drag. The government is gradually increasing gas mileage requirements so that by 2025, cars and trucks will have to average 54.5 mpg.
Increased gas use by the growing number of drivers in China and other developing nations more than makes up for the drop in the U.S. That contributes to an increase in global demand for oil, which in turn pushes the price higher. Fear of a disruption to oil supplies from the Middle East also is keeping oil prices at lofty levels.
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