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Demand for Gasoline Falling as Prices Rise

But does that signal a new recession?

by on May.05, 2011

Americans appear to be cutting back fuel consumption as prices approach record levels.

With fuel prices nearing the politically significant $4 a gallon level, industry watchers report that gasoline consumption has begun to slow.

The question is whether motorists are simply reining in their time behind the wheel through careful route planning – or whether the decline signals the start of a new recession, as fuel consumption is often linked to spending in other areas of the economy.

Gas consumption has dropped by more than 1.2%, year-over-year, during the last four weeks, according to data tracked by MasterCard SpendingPulse.

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The nation is using 13% less gasoline – about 1.2 million barrels a day – than it did in 2007, when consumption peaked.

Analysts say much of that was due to the recession, the jobless no longer needing to commute, but studies have shown that U.S. drivers are also taking steps to reduce driving by such things as route planning before running errands.

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Americans Curbing Thirst For Gasoline

Start of a long decline, experts predict.

by on Dec.22, 2010

Americans are pumping less gasoline every year.

There was a time when there seemed to be a gas station on every corner in America, and lines waiting to fill up.  But after hitting its peak in 2006, the U.S. thirst for gasoline may have finally hit its peak and is showing signs of what could be a long decline.

As 2010 draws to a close, U.S. gasoline consumption is expected to average out to about 8.2 million barrels a day, a full 8% less than the peak, four years earlier, government data shows.  And the actual figure is slightly less, since that number isn’t adjusted to reflect the ethanol that’s now blended into much of the gasoline pumped at the steadily dwindling number of service stations dotting American roads.

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By 2030, projects a study by Deutsche Bank, demand could dip as low as 5.4 million barrels a day – barely what the U.S. consumed in 1969.  Other research suggests that figure is too low, but most forecast a dip below 7 million barrels.

A variety of factors appear to be leading to the decline: more fuel-efficient vehicles are a lead factor.  Today’s typical automobile gets well more than double the mileage of the vehicles that were on the road in the 1970s, during the days of the first oil shocks.  The Corporate Average Fuel Economy standard is set to jump from 27 miles per gallon to 35.5 mpg by 2016.  And, while federal regulators have delayed a decision on what follows, the Obama Administration is clearly in favor of bumping the CAFE figure to as much as 62 mpg by 2025.

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