Skip to comments.Guest Post: Why Is Gasoline Consumption Tanking?
Posted on 04/03/2012 7:50:20 AM PDT by Mechanicos
Retail gasoline deliveries, already well below 1980 levels, have absolutely fallen off a cliff.
Deliveries in November 2011 were 30.9 MGD, a staggering 47% decline.
What other plausible explanation is there for the decline from 42.4 MGD in July 2011 to 30.9 MGD in November 2011 other than a dramatic decline in discretionary driving? That 27% drop in a few months in unprecedented, except in times of war or sharp economic contraction, i.e. recession.
(Excerpt) Read more at zerohedge.com ...
It’s all those new Chevy Volts on the road /sarc
Seriously though, there is a danger lurking in these stats.
The general public will look at this vs. the skyrocketing cost of gas, and come to the conclusion that the Law of Supply and Demand is not working anymore.
And from there, it’s only a short hop and a jump to the modern Leftist’s argument that “Capitalism has ceased to function, and it’s time it be replaced with something else”.
ts all those new Chevy Volts on the road /sarc
D’oh ,you stole my line ,but I think a lot of people wanted to say the same thing.
People use a lot less gas when they don’t have to drive to work anymore.
People are not driving as much—I know I am not—I rethink any long distance plans now—I just can’t afford it. A trip of 50 miles was common before—Now I limit my driving.
I’ve got an easy fix...
Drop the price and people will buy more.
Keep raising it, and you’ll see a lot less being sold.
People use a lot less gas WHEN THEY DON’T HAVE ANY MONEY to spend on driving, groceries, clothing, shoes, furniture, etc etc etc etc!!!!
Interesting article. Something is definitely happening if the data are correct. Intuitively, it doesn’t make much sense given population growth alone. I wonder if our aging population and lower job participation rate are the prime reasons why consumption is lower over the long term. However, it is much harder to explain the precipitous decline over just 13 years.
I finally saw something that made sense as to why the price of oil is going up - namely, that Japan has just about all of their nukes shut down post-earthquake and has to buy oil to make up for much of the lost electrical generation capacity.
Economies of scale go in reverse when you decrease production.
This is bad economics. A decrease in quantity consumed that occurs at the same time as an increase in prices (gas prices have risen), is easily attributable to a decrease in supply. I.E. the supply curve has moved up and to the left:
Simple undergraduate economics, really.
With unemployment as high as it really is, non of those are driving to work. More people on the government dole, sitting on their couch collecting checks. Who among them need to drive? Retailers purchasing less inventory, less trucks on the road. Gas prices going $4.00 plus per gallon, people drive less. Inflation hitting food prices, while paychecks stay the same.....just some thoughts.
> The general public will look at this vs. the skyrocketing
> cost of gas, and come to the conclusion that the Law of
> Supply and Demand is not working anymore.
Gas prices have been climbing steadily for a while now, since Jan 20, 2009, IIRC. And even when prices dipped for a few months late last year, people continued to find ways to save gas.
Our household stated implementing gas austerity program shortly after prices began to rise noticeably in 2010. We don’t do much discretionary driving, we have been consolidating shopping trips, and I have been working from home a lot more.
It means less time with extended family, but at least we still have Skype video calls.
>>>People use a lot less gas when they dont have to drive to work anymore.
And when their unemployment runs out, they quit all but extremely essential driving.
I see at least three factors, all working together to cause this:
1. Extremely tight personal finances, virtually everywhere in the country.
2. Rising prices.
3. The increasing use of the internet, which eliminates quite a bit of the need for travel. We’re pretty much all connected, if we want to be, without leaving our front porch.
You certainly see a lot more of those mini cars like the Toyota Yaris. I suspect that downsizing has a lot to do with it.
Oh that is a fantasic and accurate tag line
BTW.. it did not inclusive (reasons of size) Because we are run by crap socialist economics.