Drop in oil prices results in increased vehicle use

Although driving in the US stagnated from 2008 through 2013, mileage statistics from the Federal Highway Administration show driving in 2014 increased by 1.7%. As would be expected, the drop in oil prices, beginning in June 2014, that has lowered both gasoline and diesel prices has had a major effect on drivers’ use of their vehicles, according to the Institute for Energy Research’s latest analysis. High motor fuel prices have resulted in restricted use of vehicles, while low prices have accelerated their use.

Energy Information Administration data indicates that the average price per gallon of gasoline increased by over 50% between 2005 and 2011, where it remained through 2013 and did not begin to fall until oil prices dropped in 2014. By the end of 2014, gasoline prices had dropped to 2006 levels. Much of the increase in driving that began in 2014 occurred since the decline in gasoline prices started in the last half of the year.

Also affecting increased driving in 2014 is that employment levels finally reached their January 2008 peak in April 2014, ending a more than six year employment trough, the longest since the Great Depression. Unfortunately for mass transit advocates, this driving hiatus did not increase the use of mass transit, despite the federal government using 16% of the federal gasoline tax revenue to subsidise mass transit. Transit ridership remains small, at approximately 2%of all trips and 5% of work trips.

Adapted from report by Rosalie Starling

Read the article online at: https://www.hydrocarbonengineering.com/refining/26032015/drop-in-oil-prices-has-increased-vehicle-use-519/