Goodbye to guzzling? Summer driving slump seen

If it is spring, gasoline consumption must be rising in the United States --right? The maxim, based on the pattern in years past of American motorists taking to the road when temperatures start rising, is not holding up so far in 1980. And with a souring economy, energy analysts are optimistic that fuel consumption will continue at a relatively low level through the 1980 peak summer driving season. They see demand snapping back slightly from last year, when motorists had to contend with gas lines, but remaining lower than the peak year of 1978.

With respect to gasoline consumption "you cannot say anything with absolute certainty," warns S. M. Lambert, manager of energy economics for Shell Oil Company."But the chances of it going up [compared with 1978] are mighty slim," he ventures.

"There is already rationing of gasoline, according to who can afford it," adds Wayne King of the American Automobile Association (AAA) in Houston. Higher prices, he says, have reduced requests for travel information this spring by 14 percent among AAA members in Texas.

Indeed, gasoline consumption for the first three weeks of April, with warmer weather across the country, was essentially unchanged from the previous two months. So far in 1980, gasoline demand is running about 8.5 percent below what it was a year ago. And 1979 consumption was down 5 percent from 1978, according to the American Petroleum Institute.

Here are some of the factors that energy analysts expect to influence gasoline consumption this summer:

* The economic recession that many experts believe has begun in the United States will likely crimp consumer spending, and encourage more modest travel plans.

For some Americans this may actually mean more driving, as they opt for vacations closer to home, instead of long-distance air travel within the US or overseas.

However, on balance, an economic downturn is generally viewed as keeping gasoline consumption below average during this summer's peak driving season.

* Gasoline supplies are bulging in the United States, due partly to a surplus of oil in the world and greater conservation by American motorists. If consumers come to the conclusion, as they apparently did in 1975 after the Arab oil embargo, that the "energy crisis" is not for real, gasoline demand could race ahead again.

But the continuing turmoil in the Middle East, with Iran threatening to disrupt oil exports in the Persian Gulf if the United States blockades Iranian ports, is acting to remind Americans that the world oil market remains vulnerable to major disruptions, analysts point out.

* Gasoline prices are not rising so rapidly as they were earlier this year. There are instances where gasoline stations have cut prices in order to sell more.

Although this might favor greater consumption, the price of gasoline is still roughly 65-70 percent higher than a year ago and will jump 10 cents a gallon in mid-May to reflect President's Carter's new import fee on foreign oil.

* The amount of switching to air travel will be hard to judge. Airline fares are projected to rise 25 to 30 percent this year and may force more domestic travelers into automobiles this summer. But bargain rates, discounts, and other promotions being offered by a number of airlines may encourage large numbers of motorists to travel by plane, as they did during last summer's gasoline shortage.

Now, gasoline is easy to get. The AAA reports that the hours and number of days gas stations are open nationally have returned to the level of one year ago.

All these factors make the outlook for gasoline consumption over the next several months "a tough one to figure," comments C. M. Kittrell, executive vice-president of petroleum products for Phillips Petroleum Company.

But Mr. Kittrell is convinced the odds are "greatly in favor of no increase in gas demands" over what it was last year.

Other oil refiners generally echo this sentiment. They are planning future investments in refinery expansions and modernizations under the assumptions that US gasoline demand peaked in 1978.

"We had anticipated gasoline demand would peak next year. But it now looks like it happened in 1978," said an official with gulf Oil Refining & Marketing Company.

About these ads
Sponsored Content by LockerDome

We want to hear, did we miss an angle we should have covered? Should we come back to this topic? Or just give us a rating for this story. We want to hear from you.

Loading...

Loading...

Loading...

Save for later

Save
Cancel

Saved ( of items)

This item has been saved to read later from any device.
Access saved items through your user name at the top of the page.

View Saved Items

OK

Failed to save

You reached the limit of 20 saved items.
Please visit following link to manage you saved items.

View Saved Items

OK

Failed to save

You have already saved this item.

View Saved Items

OK