I have seen various posts and have heard a few talking heads talk about how higher gas prices are not reducing demand.
Looking at the energy.gov This week in Petroleum site, I have to disagree.
First look at the trends and ranges in the graphs. Look at the wide range of gasoline usage depending on what time of year it is. Now that the weather is nicer, people are driving more to go places and have fun. No one is going out anymore than they have to in January and February. Gas inventories and gas usage confirms this.
But look at the last graph. In the last three weeks, our rate of gasoline usage is less steep than it was last year. If you look at the curve and not at the numbers, the rate of change is flatter than it has been in the past. The change is not great, but there is always a lot of hard-to-change, must-drive situations we all feel we have.
What could cause this?
Slower driving. Less driving. Delayed driving. Canceled driving
Less driving is when you go to the same places but do it a little more organized. All your errands get done at once. You tie in getting the groceries with getting gas, going to the bank and picking up the kid from practice at school.
Delayed driving is when the trip you would take, to Grandma’s, to the amusement park, is not necessarily canceled but put off for a week.
Canceled driving is every time you walk, or carpool, or just stay home instead of going out.
Of these, in the US’s consumer economy, some canceled driving is very detrimental. If we decide to go out less, (and I have noticed that every time I go out I almost always spend money), I will spend less money. And now the logic gets confusing:
If I spend less money, I will have more money which means I can afford higher gasoline prices, (so my driving habits will not change) but when I go out, I won’t have any money to spend on anything, so I will still have less to spend. And the economy stays slow, but the energy companies still make a lot of money.
But I digress.
If our usage of gasoline slows at all, prices may not fall, but we will be spending less on gas. And each penny not thrown away there can be used for other things: mortgages, credit cards, college education, organic food.
