Gasoline demand is still down from last year, in part a reflection not just of high prices but also of the economic slowdown. As unemployment goes up, fewer people are driving to work and going out to dinner and shopping. Vacation trips are being put off. Trucking companies are consolidating routes as factory and retail orders slide.
Oil prices are sinking as the global economy weakens, and gasoline is following oil downward. The national average price for a gallon of unleaded gasoline on Wednesday was $2.59, $1.05 lower than a month ago and more than $1.50 below the record of $4.11 in July. Gas prices have not been this low since March 2007.
The latest statistics released by the Department of Transportation for August show that when gasoline prices rose, Americans responded by driving less. In that month Americans drove 15 billion fewer miles, or 5.6 percent less, than in August 2007. It was the 10th consecutive month of a decline in miles driven and the most sustained reduction since the 1970s.
It will be a while before the government releases official traffic data covering the last few weeks, when gasoline prices were falling steeply, so it is too soon to say for certain that people are driving more. But along with anecdotal evidence, some early statistical indicators suggest some increase in gasoline demand in recent weeks.
Data compiled by MasterCard Advisors , covering both credit and cash sales of gasoline, had been showing a strong decline of gasoline consumption in early October, when prices were still high. For the weeks ending Oct. 3 and Oct. 10, for example, gasoline sales were down 9.5 percent and 9.7 percent, respectively, compared with the same weeks in 2007.
But a MasterCard Advisors report released Tuesday showed that in the last two weeks, with pump prices falling, consumption of gasoline was down only 6.4 percent in each week compared with the same weeks of 2007.
Michael McNamara, vice president of MasterCard’s SpendingPulse data service, said gasoline consumption declined in recent months because of a combination of the slowing economy and high prices at the pump. “You are starting to get some easing from one of the two pressure points,” he added.
Tom Kloza, chief oil analyst at the Oil Price Information Service, said: “Demand is trickling back among everyday people.” He added that gasoline retailers around the country were telling him “they are probably past the bottom of demand destruction for 2008, meaning they see subtle signs that gasoline demand is increasing.”
Mr. Kloza and other analysts, however, note that the severity and longevity of the recession will largely determine how much people drive in the coming year. The apparent increase in discretionary driving has by no means translated into improved fortunes for the Detroit automobile companies, whose sales remain deeply depressed, partly because the credit crisis is preventing people from getting car loans.
The big uncertainty in the minds of analysts is whether the summer’s run of high gasoline prices wrought any lasting change in the nation’s consumer psychology.
Lawrence J. Goldstein, a director of the Energy Policy Research Foundation, said that what happened over the summer “was not demand destruction but demand reduction, which is largely reversible.” He added, “The sharp price increases did not happen long enough to permanently affect behavioral decisions.”
Mr. Goldstein’s view, however, is not shared by all energy analysts.
“Four-dollar gasoline might have accelerated behavioral changes, but the behavioral changes began at $2.50 or $3 a gallon,” said Aaron Brady, an analyst at Cambridge Energy Research Associates.
A report Mr. Brady co-wrote in June noted that more Americans bought the Toyota Prius hybrid than the Ford Explorer sport utility vehicle in 2007 and that the growth in total vehicle miles traveled in the United States slowed significantly in 2005 and 2006, before declining slightly in 2007. The report noted that it was the first time that total vehicle miles had declined since the late 1970s.
The Arab oil embargo and Iranian revolution led to oil supply shocks at that time, creating a prolonged period of high gasoline prices that lasted through the mid-1980s. People cut down on their driving and drove smaller cars, and government standards forced a big improvement in the fuel efficiency of the American car fleet.
But in the late 1980s, as prices eased, people switched back to larger cars. With prices low through the 1990s and early 2000s, sport utility vehicles became the vehicle of choice for many Americans. Those vehicles, because they were technically light trucks, were subject to lower efficiency requirements.
Conservationists hope there will be no similar loopholes in recently adopted efficiency standards that dictate that automakers build vehicles averaging 35.7 miles a gallon for passenger cars and 28.6 miles a gallon for light trucks in model years 2011 through 2015, with better mileage for the trucks after that. Other analysts, however, warn that improved fuel efficiency over the years has simply encouraged people to live farther from work and otherwise drive more miles on the same budget.
In Vinton, as in so many American towns, what drivers seem to care about most is the price at the pump, and they said in recent interviews that cheaper gas was helping them live better.
Willy Lewis, a nurse’s aide, said he just started mowing his lawn every week again after mowing it every third week this summer to save gasoline. Katina Sneed, a housewife who would like to work as a secretary, complained that higher gasoline prices had impeded her ability to find employment.
“I didn’t have enough money to put in the car to look for a job” until the last few weeks, she said. “I can do a little more searching now.”