Long-term stagnation turns into a sharp decline.
Over the four weeks through September 9, gasoline consumption dropped by 11.7% from the same four-week period in 2019, to 8.56 million barrels per day on average, below the same periods in 2020 and 2021, according to EIA data today.
The EIA measures gasoline consumption in terms of barrels supplied to the market by refiners, blenders, etc., and not by retail sales at gas stations. On this moving four-week average basis, it was the steepest decline so far this year, that has seen nothing but declines from the same periods in 2019.
The decline accelerated even as gasoline prices have plunged from the top of the spike in mid-June. This may indicate that the classic economic principle of “demand destruction” – where a price spike triggers a decline in demand that then causes the price to back off – may not just be a blip, but that this demand destruction may have become in part structural.
Peak driving season is in the summer. But this year, gasoline demand in the summer (red line in the chart below) was substantially below the summer driving season in 2019 (yellow line) and in 2021 (gray line), and roughly even with the beaten-down levels of 2020 (green line). And then in August and September, demand fell further, and ended below the levels of 2020:
This demand destruction caused by sky-high gasoline prices is happening on a global scale. It’s where price resistance has set in, and people have changed their behavior a little here and there. They cut out unnecessary trips. They’re prioritizing their most fuel-efficient vehicle in the garage. When they buy a vehicle, fuel economy is moving up as a decision factor. Working from home has become sticky, and fewer people are commuting to work every day. And for vacations, people might have chosen to go places that involve less driving.
This demand destruction pushed down the price.
The average price of gasoline in the US, all grades combined, had spiked to $5.00 a gallon by June 13, according to EIA data. This type of price spike – up 63% year-over-year – sent shock waves through wallets and minds. Everyone was talking about the price of gasoline. But the average price has now dropped to $3.69, which is where it had been for years in the past – and yet, demand destruction accelerated…..
Are you fed up? Are you worried that America in rapidly sliding into a neo-Marxist state by the radical left in control of Washington with historically narrow majorities in the U.S. House and Senate and an Executive controlled by unnamed far leftists in place of a clinically incompetent President Biden? They are desperate to keep power and complete their radical progressive agenda that will change America and our liberty forever.
Americans just witnessed the passage of the Inflation Reduction Act of 2022 without one Republican vote in the U.S. Senate and House (just as Obamacare was passed in 2010). The IRS will be hiring 87,000 new agents, many armed, to terrorize American taxpayers.
Americans witnessed the FBI raid at the Trump Mar-A-Lago home and property of President Trump, truly a first in all of American history. We know what that is about.
It is undeniable that the Democrat Party and the administrative state (the executive branches of the DOJ, FBI, IRS, et al) are clear and present dangers to our Republic and our liberty as they increasingly veer further away from the rule of law and the Constitution. What is the solution? At this critical juncture, there is only one action we can all take.
The only viable and timely solution at this critical point is to vote – yes, vote correctly and smartly to retake the U.S. House and Senate on November 8th and to prepare the way to retake the White House in two years. Vote and help everyone you know to vote. Please click the TAKE ACTION link below – we must vote correctly and in great numbers to be sure our votes are counted to diminish the potential for the left to rig and steal the midterms and the 2024 elections as they are clearly intending to do after their success in 2020.