Monday, February 25, 2008

$3 Gallon Gas Begins To Reduce Driving

For the first time perhaps since the 1979 oil shortage, gas consumption is slightly down.

From the Sunday Boston Globe:
Average daily gasoline consumption in the United States has decreased in each of the past four weeks from a year ago, according to recent data. In the past six months, average daily consumption slipped two-tenths of a percent from a year earlier, after growing 2.5 percent in the previous year.

In the Northeast, gasoline demand has dropped as much as 3 percent, after growing 1 to 2 percent annually in recent years, said Joe Petrowski, chief executive of Gulf Oil LP, a Newton wholesaler and distributor that supplies about 10 percent of the region's gas stations.

So why did it take so long? Apparently since the 70's we are living farther away from our jobs (in places with fewer transportation alternatives) and our disposable income has increased. It is estimated that in the 1970's a 20% increase in gas prices curtailed driving by 6%, in 2008 it's only one percent.