Americans will use the most gasoline this year since 2007, led by the nation’s youngest drivers.
Americans under 35 are almost twice as likely as those above that age to report driving more because of the $1-a-gallon drop in prices at the pump over the past year, AAA, the nation’s largest motoring group, said in a report today. About 13 percent of all U.S. drivers are putting more miles on their cars because of the decline.
Oil companies looking for increased demand to help strengthen prices amid the largest crude glut in 85 years may have a surprising ally. Executives have blamed youthful habits, such as living near work and using public transportation instead of cars, for flat demand growth in the U.S.
“That millennial who didn’t even bother to get a car because they knew they couldn’t afford to buy it or the gasoline to drive it can now afford to go to the movies, afford to go to the beach, afford to go places with friends,” Alan Pisarski, a transportation analyst, said by phone from Lake Barcroft, Virginia, on Thursday. “Because of the economy coming around and fuel prices decreasing, they’re beginning to be able to afford these things again.”
Retail gasoline prices in the U.S. rose 1.7 cents a gallon Wednesday to an average of $2.58, AAA said on its website. Prices have risen nearly 20 cents since mid-April. A year ago on the same date, the average gallon was $3.691.
About 19 percent of U.S. drivers aged 18-34 reported driving more because of the drop in gasoline prices, compared with 10 percent of people over the age of 35.
Six in 10 Americans said they’re more likely to take a road trip more than 50 miles away from home this year because of lower prices, with drivers aged 18-34 more likely to do so than those over 35.
Even with the decline in pump prices, only 17 percent of Americans think gasoline is cheap at $2.50 a gallon, while 39 percent still think it’s too high. A majority of Americans believe gasoline will be cheap again when it falls to $1.50.
American gasoline demand will average 9.07 million barrels a day this year, up from 8.92 million last year, the Energy Information Administration said in its Short-Term Energy Outlook earlier this month.
So far this year U.S. households have saved about $400 each because of lower gasoline prices. That’s generally had a bigger impact on younger people, who tend to be newer to the workforce, AAA spokesman Michael Green said.
“Younger Americans make less money than the rest of the population,” Green said by phone from Washington. “If you’re not making very much, lower gas prices might actually make a difference in what you spend money on.”