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Despite fuel consumption increases, demand for gasoline remains flat and Americans are driving fewer miles for the first time in 25 years, according to a new study by the Cambridge Energy Research Associates (CERA), reported the Houston Chronicle. While convenience stores hold a majority of gas sales, trends seen overseas might be the future in gas retailing, the study suggested.
What seems to contradict itself -- that while gallons used increases, demand remains flat -- is explained by a change in car buying and driving habits of the American consumer. Since the gas price run-up in 2005, Americans have changed the way they drive and the cars they purchase, the report stated. In addition, there are increasing numbers of older Americans that drive less than previously.
New car buyers are not buying the gas guzzler SUVs and trucks made by car manufacturers, but instead, are opting for smaller, fuel efficient cars and trucks, according to Daniel Yergin, chairman of the CERA. Sales of SUVs and trucks have dropped 3 percent since its peak in 2004, according to the report. Hybrids account for some of the switch, as they currently make up 1.4 percent of all vehicles sold.
"Clearly [gas] price really does matter and has an immediate impact on what we do on the road," Yergin said in the report. "But the bigger impact long-term could be what we do in the showroom."
Gasoline demand grew less than half a percent in 2005, to 141.6 billion gallons; far from the 1.6 percent growth seen in the 90s and early 2000s, the report stated. For year-to-date 2006, demand was slightly higher, at 1 percent, but still below the average.
In 2005, American drivers drove an average 13,657 miles, 40 percent farther than 25 years prior. They also used an average 703 gallons of gas. Longer commutes, reliance on cars for everyday travels and expanding suburbs account for this increase, the report stated.
However, the miles driven in 2005 were lower than those in 2004, when consumers drove 13,711 miles. The study stated that there are an increasing number of older drivers -- over the age of 65 -- who drive less; in addition, there is a lower number of young drivers -- ages 16 to 21 -- which dropped from 8.8 million to 1.8 million.
As the U.S. population grows older each year, the number of miles driven will level off, or drop, according to the study.
France: the Future of Gas Retailing?
The locations that Americans choose to fill their tanks is also changing. The study found that 65 percent of all gas purchased is at c-stores, due to the convenience of a "one-stop shop" for gas, food and coffee, Yergin said.
However, big box retailers that sell gas are seeing an increase in sales. Currently, the big box, supercenters and other retail formats that sell gas account for 2.4 percent of all gas sales in the nation. But the trends could follow those seen in France, where 57 percent of gas sales are from these types of retail channels, the report stated.
"How much that recognition will affect the decisions of consumers when they buy new cars in terms of emphasizing greater fuel efficiency or not will have much to do with what happens to gasoline demand in the United States in the years ahead," the report concluded.