Fuel demand in Missouri remains robust despite ‘high’ prices

I’ve been tracking fuel consumption over the past few months in light of rising fuel prices that have spawned an endless parade of stories of ‘pain at the pump’ and ‘record gas prices’ in the news. What we have really seen is the pain of captivity and an addiction to self record. With few options for most Missourians to accomplish trips by means other than driving, they are trapped.

NextSTL – Near-record demand continues despite high level? gas price

NextSTL – Record Gasoline Prices Haven’t Depressed Fuel Sales in Missouri

The average price in Missouri at the start of May was $3.80/gal and ended the month at $4.20/gal. It was around $2.75/gal in May 2021, or 45% higher in May than last May.

Fuel consumption was down 2.63% in May from a year ago, although around 3% from 2019 before the pandemic. It was the 5th highest May since 2004.

A drop in consumption of 2.63% with a price increase of 45% for an elasticity of -0.06 shows how inelastic demand is in the short term. Part or all of the drop could be explained due to the fact that May 2022 has one less weekend day than 2021.

The year-to-date for 2022 is the second after 2005, up 3.66% from 2021 and 3.6% above the average for 2004-2022.

Government policies, priorities and spending have played a significant role in creating the inelasticity we see. As election season approaches, be sure to ask the candidates what they plan to do to reduce your captivity to car and fuel prices.

About Aldrich Stanley

Check Also

Retail gasoline margins in Calgary are more than double the national average

Breadcrumb Links Local News Energy Publication date : Jul 22, 2022 • 1 day ago …