Tags: gas | price | crash | per-capita

Price of Gas Crashes Along With How Much We Pump

By Dale Eisinger   |   Friday, 28 Dec 2012 01:56 PM

As the gasoline "price crash" continues, a new study shows that during the last few years of zigzagging costs at the pump, there has been a steep drop in per-capita gasoline use by U.S. drivers.  
One reason is that more and more commuters apparently are opting not to drive, according to a report from Doug Short at AdvisorPerspectives.com.
The all-time high of gas use per-capita over a 12-month period was set in August 2005. Current gas consumption is down 7.7 percent from that peak. Americans are now using about 350 million gallons of gasoline a day — about the same as in September 1998, according to Short.
Short says higher gas prices certainly can reduce demand, but that's currently not a problem.
In Southern California, where a gallon of regular hit $4.71 back on Oct. 9, the average price in the Los Angeles on Wednesday was $3.59, down 21 cents from $3.80 a month ago, according to the AAA. Wednesday's price was up a penny from a year earlier.
Nationally, gas prices have fallen nearly 12 cents since the beginning of December, according to the Lundberg Survey. Heading into Christmas week, the average cost of a gallon of regular gasoline was $3.26, down 58 cents over the past 11 weeks. The average national price is 2 cents higher than it was a year ago. That was still 2 cents higher than it was a year ago.
However, good news at the pump isn't likely to continue, survey publisher Trilby Lundberg told CNN.
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"Higher crude oil prices are translating into higher wholesale gasoline prices," and retailers will need to pass them through, she said, adding that prices are expected to jump 5 or 10 cents per gallon soon.
She was right. The price of oil rose sharply Wednesday as U.S. benchmark crude jumped $2.37, or 2.7 percent, to finish at $90.98 per barrel in thin post-Christmas trading in New York.
Although higher gas prices can reduce the number of fill-ups, Short sees other reasons. For example, as hybrid cars and gas mileage become more prominent in the worried world of climate change, it stands to reason more fuel-efficient cars can take credit for cutting the gas usage of many drivers.
“Some of the shrinkage in sales can be attributed to more fuel-efficient cars,” Short writes.

“But that presumably would be minor over shorter time frames and would be offset to some extent by population growth.” Meaning that although overall gas consumption is up, per-capita consumption is still down — 20 percent since March 1989, Short says.
Short also notes that inefficient SUVs are still among the top 10-best selling vehicles.
“Gasoline prices and increases in fuel efficiency are important factors, but there are also some significant demographic and cultural dynamics in this data series,” Short believes.
He thinks five factors play into the drop in gasoline use:
an aging population leaving the workforce
a trend toward a portable workspace and workers not commuting at all

advance communication technologies providing alternatives for face-to-face interaction, so no transportation is needed

a trend among young adults who drive less

an acceleration of urban growth.

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