The average price for a gallon of gas went down by five cents from last week to Tuesday, according to AAA, but only due to decreasing demand because Americans can’t afford to fill up their tanks.
“You have to have some demand destruction to give supply a chance to catch up,” an energy analyst told the Wall Street Journal. (RELATED: ‘Tough Summer’: Energy Sec. Makes Bleak Forecast, Signals Concern About Gas)
A 10% rise in gasoline prices results in a 2% or 3% decrease in demand, according to an economist at the University of California, Berkeley.
Consumers are responding by cutting back on how often, and by how much, they fill up their tanks. Many Americans are now putting in a few gallons at a time rather than filling their entire tank all at once, analysts told the WSJ. Some are carpooling or cutting back on driving their cars in the first place. In all, Americans are using a lot less gas than they used to in response to record high prices, the Wall Street Journal reported.
American drivers are starting to buy less gasoline as they feel the economic burden of record prices that continue to hover near $5 a gallon https://t.co/CHj8tZcN0c
— The Wall Street Journal (@WSJ) June 22, 2022
High gas prices have been reducing consumption even in police departments. One Michigan police department announced it couldn’t respond to all 911 calls in person after blowing their fuel budget for the year in June.
The Consumer Price Index reached its highest rate in 40 years in May. Energy prices increased by 34.6% in the last year, and gas prices are up 48.7%. Other transportation costs are rising rapidly as well. Over the last year, the price of a new car rose 12.6% and the price of a used car rose 16.1%. In the month of May, airline fare rose by 12.6%.