The summer driving season is just around the corner and record gasoline prices are creating all sorts of challenges for individuals and the overall economy. Now, the effects are starting to show up in the data. In this week’s post, we are reviewing weekly gasoline consumption data and the return to sluggish usage.
Reviewing Gasoline Usage Trends
U.S. gasoline consumption has been all over the board in recent years. First was the pandemic drop, followed by a slow recovery through 2020 and early 2021. By last summer, however, gasoline consumption largely recovered and even posted an all-time weekly high. In recent months, however, usage has again slumped.
Figure 1 captures the last few years in one chart. In blue is the range of observations between 2015 and 2019, which we use as a benchmark for “normal” conditions. The data for 2020, 2021, and 2022 are also shown. As mentioned earlier, gasoline usage largely “recovered” by fall 2021. It’s difficult to definitively define a recovery, but weekly data were largely within the pre-COVID range.
Consumption in 2022 started strong and remained within the 2015-2019 range. By April, however, usage slipped below the pre-COVID range. For example, usage through Week #12 of 2022, or late March, was 102.5% of 2021 activity for the same period. Since Week #13, however, 2022 usage has been just 97.3% of the same period in 2021.
Furthermore, it looks like the slump could be getting worse as recent data (through Week #21) reported 8.8 million barrels per day of implied usage, which is just 91% of the pre-COVID average for that same week. The last time relative usage was this low was Week #9 of 2021. While gasoline consumption might have recovered from the pandemic, it now faces new challenges from high prices.
Wrapping It Up
Weekly gasoline consumption data were a helpful indicator throughout the pandemic, especially in the early months, as they provided an idea of economic activity. While gasoline consumption largely returned to the pre-pandemic level for the last half of 2021, higher prices are now affecting usage trends.
While it is still early in the calendar year, the recent setback could result in the third consecutive year of U.S. gasoline patterns being disrupted. Just as policymakers struggled to address renewable fuel usage and mandate challenges stemming from 2020, the current gasoline consumption dip could create a new set of policy challenges.