U.S. drivers are doing something they haven’t done for nearly two decades — consume less gas.
When we are talking about a decrease in Gasoline consumption it is in the range of half a percentage point.
That may not sound like much, but it would be the first time since 1991 that there’s been a decline in annual Gasoline consumption. And it would be only the eighth year since 1951 in which demand for Gasoline has declined.
It is clear and obvious that the perfect storm of deflation, including the bursting bubbles in housing, etc and the rise in Gasoline prices due to an increase in foreign consumption has gotten the attention of the average American driver.
According to AAA, the national average on Monday for a gallon of Gasoline was $3.50 a gallon, or 64 cents higher than a year ago. Diesel was $4.20 per gallon, or $1.27 higher than a year ago.
Although higher Gasoline prices were expected to have an effect on demand, it wasn’t clear just how high they would have to go to do so. Many market watchers believed prices would have to stay above $3 per gallon for several months or even a year. That tipping point for Gasoline demand may have arrived.
Mike Right, a spokesman for AAA Club of Missouri, said that a decline in Gasoline usage shouldn’t come as much of a surprise. A survey conducted in January by AAA found that many motorists were already deciding to change vacation plans for this summer by planning for shorter trips. “We are starting to see some signs of that,” he said.
There are indications that a fundamental shift in consumer driving habits may have started in December, when total miles traveled in the U.S. dropped 3.9 percent compared with the same month a year earlier. Miles traveled in the Midwest were down 5.8 percent.
There is already a shift in demand from Gasoline guzzline SUVs towards higher MPG vehicles.
The government is soon to release new Gasoline efficiency standards with a minimum requirement of 35 MPG by 2020.
At the present time, newly manufactured vehicles in America are required to maintain at least a 27.5 MPG average and SUVs, trucks and vans are required to measure up to a 22.5 MPG minimum average.
Congressional Democratic leaders are expecting that, in today’s dollars, these new Gasoline economy standards will save the average driver somewhere around $1000/year.
Meanwhile, other drivers are turning to public transportation. The increase in the use nationwide of busses,etc last year was 4% and this year it is already 9%.
A decline in Gasoline demand could help give some relief from high prices. Although prices are surging as the traditional summer driving season approaches, some market followers expect prices to ease back later this summer.
So the question is a very simple one. Do people need to ride the bus and bicycles or simply sit at home and watch television or plot the revolution on the internet or do other things on the internet instead of living their lives in the real world? Or is there something else that they can do to offset rising Gasoline costs?
There sure is and it is called Water4Gas