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Gasoline prices are setting records. But what about gasoline bills?

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In mid-June, average gasoline prices nationwide hit $5 per gallon, an all-time record (in nominal terms). You probably know this already because those prices are made highly visible by bright lights on big signs all over the country. 

But do you know how much you spent on gas in total last month? Or how that compares to what you spent five or ten years ago? 

Surprisingly, while gas prices are at record highs, the amount Americans spend on gas each month isn’t. Why is that?

 

 

Figure 1. Inflation-adjusted gasoline price (April 2022 dollars/gallon)

 


For one thing, despite offsetting trends in size and weight, cars have been getting more efficient: the miles-per-gallon of new vehicles has improved about 25% overall since 2005, thanks in large part to stronger federal fuel economy standards. For another, Americans drive less on average than in the early 2000s. Those factors mean drivers are using less fuel than they used to, mitigating some of the pain from high prices at the pump.

Table 1. Per-driver April gasoline expenditure, consumption and vehicle-miles traveled, selected years [1]

As a result, the typical U.S. driver spent 22% more (in today’s dollars) at the gas station in April 2012 than in April 2022, even though inflation-adjusted gas prices were only 14% higher. 

As the table above shows, both average monthly driving and average gallons of gasoline consumed per driver were lower in April 2022 than in April of any other year examined, except April 1993, when Americans drove fewer miles on average. The trend of falling gasoline consumption is a welcome one, as transportation has become the largest source of greenhouse gas emissions in the country.

 

Note: “Finished motor gasoline” refers to gasoline usable in a spark-ignition engine and includes conventional gasoline, oxygenated gasoline and reformulated gasoline, but not aviation gasoline.

The average U.S. driver consumed 15% less gas in April 2022 than they did 20 years earlier. Improvements in fuel economy accounted for the majority of that reduction in average fuel use, but reductions in the number of miles driven also played an important role, particularly between 2017 and 2022. 

So far, the response of politicians to high gas prices has been to throw money at the problem: in particular; sending drivers checks or suspending gasoline taxes. But as the data show, the most important interventions that can help drivers save money at the pump are those that reduce their dependence on gas in the first place. This analysis shows that our strongest tool over the last few decades has been improved vehicle fuel economy standards, which were recently updated but could be tightened even further. Even better would be to give people more options to drive less, since such efforts would also bring climate, health, safety and wellbeing benefits. Freezes on transit fares and investments in public transit and walking and biking infrastructure are other great ways to make not driving a car more feasible and attractive for more people. And all of these solutions, besides easing the burden of high gas prices, help shift our transportation system towards one in which no one needs to know the price of gas – because no one uses it.

Photo credit: Jakob Rosen via Unsplash.

Notes

[1] Data on gasoline supplied (a proxy for consumption) and gasoline prices come from the Energy Information Administration. Prices were adjusted for inflation using the Personal Consumption Expenditure measure of inflation from the St. Louis Federal Reserve bank. Total number of registered drivers and monthly total vehicle-miles traveled data were from the Federal Highway Administration. For 1993, the total vehicle-miles traveled is from a separate archived dataset. Data on gasoline supplied, gasoline price, inflation value and vehicle-miles traveled are monthly data for the month of April in the relevant year. However, gasoline consumption for April 2022 uses weekly data because the monthly value had not been updated at the time of writing. The number of registered drivers is an annual figure and, for April 2022, is the number of drivers registered in 2020, the latest year of data available from the Federal Highway Administration.