Key facts
- Gasoline consumption in the US fell 6.1% year-over-year in May.
- Higher fuel prices following the US and Israeli attacks on Iran are cited as a primary reason for reduced demand.
- Consumer habits, including increased use of public transportation and more fuel-efficient vehicles, are contributing to the decline.
- Telecommuting and the availability of electric vehicles also play a role in decreased gasoline demand.
- Spending at gasoline stations increased 21% from February to May, despite lower consumption.
Americans' reliance on gasoline may be permanently altered following a surge in fuel prices triggered by the United States and Israel's attacks on Iran in late February. While spending at gas stations rose 21% between February and May, overall consumption decreased by 6.1% year-over-year in May, according to Dow Jones Energy.
Denton Cinquegrana, chief oil analyst at Dow Jones Energy, stated that about half of this consumption drop is a direct consumer response to higher prices, with the other half attributed to a long-term trend of increasing vehicle efficiency and the growing adoption of telecommuting. Many consumers, particularly those with lower incomes, are foregoing discretionary driving such as road trips and travel for sporting events.
Judy Vassallo, an 89-year-old retired art teacher, exemplifies this shift. She has transitioned from driving her 2002 Honda CRV to using the city bus, which is free for seniors, finding it easier and saving money on fuel and parking. Vassallo noted that once a behavior becomes a habit, it integrates into daily patterns.
The increased availability of electric vehicles on the market also contributes to a reduced demand for gasoline.