CAAA reports that the national average price of a gallon regular gasoline is $4.80. This weekend marks the beginning of the July Fourth holiday weekend. But that’s unlikely to keep Americans from hitting the open road this summer.
Drivers are likely to make changes to their driving habits and plans for road trips to lessen sticker shock. For instance, in February, when gas prices were around $3.50, a survey by AAA found that 59% of Americans would make changes to their driving habits or lifestyle if the cost of gas rose to $4 per gallon—and 80% of those people said they would drive less.
But when the rubber meets the road, there doesn’t appear to be a dramatic behavioral shift when gas prices jump. As one analysis from the Federal Reserve Bank of Dallas put it in June, fuel demand is inelastic, meaning that it doesn’t rise or fall to the same extent as prices. “U.S. The U.S. has a history of slowing down their fuel consumption in response to rising prices. This is primarily because most consumers must drive to work, school, grocery stores, and other destinations every day,” the Fed report notes. “Additionally, there are no scalable alternatives that can be immediately substituted.”
To see how truly inconsequential fuel prices are on Americans’ driving habits, TIME ran an analysis of historical fuel prices and fuel demand using data from the U.S. Energy Information Administration. According to the results, Americans consumed 8.93 million barrels of fuel per day from June 24th through the 24th. This is only 1 percent less than the 9.3 million barrels per person who has consumed gasoline on an average daily basis since 2000. However, gas prices were 90 percent higher than that of the average price for the same period.
This isn’t unlike what has happened in the past. As the chart below shows, fuel consumption has fallen during past periods of higher fuel prices—just not in a very significant way. Fuel consumption suffered a real hit during the recent pandemic. The pandemic had absolutely nothing to do the gas prices that had plummeted.
Despite sticker shock at the pump this summer, experts don’t expect that Americans will cancel their vacations en masse. “[Fuel] demand is lower, but not drastically lower, because the car is still the primary mode to travel this summer,” says Devin Gladden, a spokesperson for AAA. He believes that road travelers will be more cost conscious in other ways in order to satisfy their “urge to reclaim the summer travel plans” after two pandemic years. “They will find ways to stay closer to home so the distance is shorter,” he says. “Or use public transit during their trip.”
According to NACS, these cost-cutting strategies are already being used at gas stations with adjoining shops. According to the National Association of Convenience Stores (NACS), retail sales are down which means that customers have stopped buying in-store items to offset gas.
Continue reading: Americans Are Refraining from Purchasing Cars Now because of High Gas Prices
NACS has also noticed that drivers are buying fewer gallons per stop—but stopping more often. Cash customers account for 20% of transactions and will purchase whatever $20, $40, or $30 will buy them. An NACS spokesperson Jeff Lenard says that the reason may also be psychological. “Customers may be hedging, playing the market each time they fill up, and trying to see if they get a better deal in a few days.”
NACS conducted regular surveys in the middle of 2010 asking drivers to indicate what price would motivate them to alter their driving habits. Lenard compares the survey results to scenes in 1982’s horror movie. PoltergeistA mother running down the hall to get her kids but it keeps getting longer. When gas keeps increasing, so, too, do drivers’ tolerance for them, he says of those surveys’ findings, and the threshold price for staying off the road becomes perpetually higher.
Americans find it very difficult to pay for high-end gas because of the fact that drivers are both American and foreign. You can find it hereGas for practical uses and to be paid wantTo enjoy the freedom of driving. Then they come up with ways to justify the costs or make them more affordable. “There’s that Clark Griswold theme. You remember all the good things about road trips and you forget the bad things,” says Lenard. “After two years of being cooped up, people are ready.”
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