The Labor Day holiday marked the end of the peak driving season, a good occasion to review the most recent data on gasoline consumption, which accounts for almost 10% of global liquid fuels consumption. For the first half of 2013, EIA data show gasoline consumption lower than the comparable 2012 period by 50,000 barrels per day (bbl/d), or 0.6%, lower than in the comparable 2012 period (Figure 1). Economic growth, gasoline prices, and vehicle fleet efficiency are key determinants of gasoline use. So far in 2013, year-over-year economic growth and slightly lower retail gasoline prices, a combination that would generally lead to increased gasoline consumption, have been more than offset by the increased fuel efficiency of the light-duty vehicle fleet.
The gasoline consumption trend through first-half 2013 was largely a continuation of the trend observed in 2012, when gasoline consumption also fell about 50,000 bbl/d compared to 2011. This average decline in consumption of about 50,000 bbl/d represents a more moderate pace of demand deterioration than in 2011, when significant price increases as a result of Libyan crude oil production outages were the main impetus behind an average 240,000-bbl/d decline in consumption compared with 2010. Since the beginning of 2011, gasoline consumption has declined year-over-year in 21 of the 30 months for which EIA has published monthly data.
The net effect of the income, price, and fuel efficiency impacts as modeled by EIA yields a decline in gasoline consumption of 0.8%, which is roughly consistent with the 0.6% year-over-year decline observed for January through June 2013.
Real gross domestic product (GDP) for the first six months of 2013 is estimated to be 1.7% higher than for the same period in 2012. According to EIA's Short-Term Energy Outlook (STEO) model, the short-term income elasticity for vehicle miles traveled is about 0.6 (meaning a 1% increase in income results in a 0.6% increase in miles traveled). This elasticity estimate suggests that motor gasoline consumption should have been 1.0% higher this year than in the same period in 2012, assuming no year-over-year change in gasoline prices or fuel efficiency of the vehicle fleet.
In its STEO model, EIA estimates the short-term elasticity of vehicle miles traveled with respect to the price of gasoline to be about -0.04 (a 1.0% increase in prices leads to a 0.04% decline in highway travel). The average pump price of regular-grade gasoline during the first six months of 2013 was 2.1% lower than the same period last year. Motor gasoline consumption would therefore have been 0.1% higher than in 2012, assuming no year-over-year change in economic activity or improvement in the average efficiency of the vehicle fleet.