I’ve been tracking fuel consumption the last few months in light of rising fuel prices that has begat an endless parade of “pain at the pump” and “record high gas price” stories in the news. What we’ve been seeing really is the pain of captivity and record high auto dependency. With few options for most Missourians to accomplish trips by means other than driving they are trapped.
The average price in Missouri at the beginning of May was $3.80 /gal and ended the month at $4.20 /gal. It was about $2.75 /gal in May 2021, so 45% higher this May over last.
Fuel consumption went down 2.63% in May compared to last year, though about 3% above pre-pandemic 2019. It was the 5th highest May since 2004.
A 2.63% drop in consumption with a 45% increase in price for an elasticity of -0.06 shows how inelastic demand is in the short term. The drop could be accounted for in part or in whole due to May 2022 having one fewer weekend day than 2021.
Year to date for 2022 is second to 2005, up 3.66% over 2021, and 3.6% above average for 2004-2022.
Government policies, priorates, and spending have played a large role in creating the inelasticity we’re seeing. With election season coming up, be sure to ask candidates what they plan to do to reduce your captivity to car and fuel prices.