Cheap Gasoline Creates Illusion of Abundance for American Motorists and Policymakers

11 Apr 2016   Economy, Prices

The U.S. saw average retail gasoline prices drop below $2 per gallon in early January, the lowest prices observed since 2009 during the depths of the global financial crisis. Cheap gas is fueling a driving boom in the United States, with consumption well above the five-year average for this time of year. It is still early, but the U.S. is on course to set a new record in gasoline consumption in 2016, breaking the previous high set in 2007. The EIA releases weekly estimates on gasoline consumption, which are less precise than the retrospective monthly surveys, but assuming the latest data is accurate, the U.S. is currently consuming gasoline at a rate typically seen at peak driving season in the summer months. As a result, the upcoming summer could be a blockbuster for American gasoline demand. Fuel efficiency gains secured? In 2009, U.S. President Barack Obama issued new standards […]

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