AAA: Millennials Drive Increase In US Fuel Consumption Amid Low Prices

by Cameron Aubernon

Published: May 1st, 2015

aaa millennials drive increase in us fuel consumption amid low prices

With fuller wallets and lower prices at the pump, millennials are leading the charge toward the highest consumption among Americans since 2007.

AAA says motorists under 35 are nearly twice as likely to report increased driving than those above 35 because of the drop in gas prices, Chicago Tribune reports. The motoring group noted 13 percent of all drivers – 19 percent of drivers 18-34, 10 percent of those 35 and over – are putting more miles on their vehicles as a result of said decreases, which have fallen by $1 per gallon compared to last year.

Though oil companies blamed millennials for using mass transit and living in the city as two of the reasons for low demand for their offerings, they may soon have them to thank for reducing the glut in the supply chain – strengthening prices in so doing – as transportation analyst Alan Pisarski explained to the newspaper:

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. Because of the economy coming around and fuel prices decreasing, they’re beginning to be able to afford these things again.

Demand for gasoline in the U.S. this year is expected to average 9.07 million barrels/day, compared to 8.92 million/day in 2014, as a result of lower prices at the pump. However, AAA says 17 percent believe $2.50/gallon is cheap while 39 percent claim it’s still too much; 58 percent agree $1.50/gallon is cheap.

The low prices have also affected wallets this year by adding $400 to each household’s bank account. The savings may come in handy on vacation or other long-distance travel: 6 in 10 Americans are more likely to drive 50 miles or more, with 68 percent of those under 35 making those plans compared to 57 percent 35 and over.

[Photo credit: Minale Tattersfield/ Flickr/ CC BY-SA 2.0]

#AAA #FuelConsumption #GasPrices #Millennials #Reports #UnitedStates

Cameron Aubernon

Seattle-based writer, blogger, and photographer for many a publication. Born in Louisville. Raised in Kansas. Where I lay my head is home.

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7 of 26 comments

Majo8 on May 01, 2015

Damn. Only .20 a gallon difference between regular and premium. There are Shell stations in Ohio that charge nearly .60 difference!

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- Lorenzo on May 01, 2015
  
  The stations probably figure, if you can afford to own/lease a Mercedes or Beemer, you can afford the required premium.
  
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- Pch101 on May 01, 2015
  
  @Lorenzo Gas stations make very little money on selling gas. If you ignore the convenience store, then your transaction will probably barely be little above breakeven. Refiners and gas stations like lower gas prices, since demand goes up and their margins are low. It's the oil companies that lose out when prices fall.
  
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- Lorenzo on May 02, 2015
  
  @Pch101 The gas pumps are the loss leader to get you into the store. Stand-alone gas stations made a couple cents per gallon, but oil companies usually own a piece of the convenience stores connected to them. Look at Arco, Circle-K, Cumberland Farms in the northeast - the stores own the pumps, and some, like Cumberland Farms, actually owns branding rights to the gas. Those stores are getting bigger carrying more than soft drinks and junk food for travelers. In many urban areas, they serve as neighborhood grocery stores, so gas is just another low margin product, like a can of peas. They can charge Beemer Boy an extra 30 cents for premium, since they don't carry artisanal, organic, free range bread.
  
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- 28-Cars-Later on May 02, 2015
  
  @Lorenzo I'm sure if varies but if you look at the RBOB and then add in applicable taxes in my area there is still a roughly 30 cent markup, which at 3.00 all in is a ten percent margin. I once asked a classmate in 2004 what his family's gas station paid for gas when they purchased it. He said they were paying $1.94 (inc all taxes) and the pump price at the time was $2.19. He followed this up with the credit card companies would take about 20 cents a gallon when used however cash deals still netted that 25 cents. So your reasonable margin but low profit to the reseller is really the result of bankster criminals yet again.
  
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- Pch101 on May 02, 2015
  
  @Lorenzo The premium costs them more, too -- it really does cost more to produce a gallon of premium than a gallon of regular. And demand for premium is falling, so it presumably remains longer in inventory than it once did. The stations aren't benefiting much, if at all, from the higher price of premium.
  
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Speedlaw on May 02, 2015

When college time came, it was a shock. You do realize rack rate for a first tier private college is 60k/year, before add ons. Private in state is a mere 25k/yr. It is three times more, adjusted for inflation, than my parents paid for a first tier private school I don't think that most older folks, ie those running things, really get how much a new grad is behind before they begin. Cars ? Oh, they like them and know them, but you have rent and a student loan payment that looks like rent. This wasn't the case in the 60's, 70's and 80's, but it is now. Having said that, I know a millenial who just bought a house with her SO and a Yaris, so she defies and confirms at once.

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