US gasoline consumption last year reached its highest volume in almost a decade, but more fuel efficient vehicles will keep demand from setting new records, the Energy Information Administration (EIA) said today.
Gasoline demand last year averaged 9.2mn b/d, its highest volume since 2007 and a 240,000 b/d increase from the previous year, according to the EIA. The agency expects consumption to increase another 70,000 b/d next year, according to its latest Short Term Energy Outlook.
Sharply lower retail gasoline prices have helped to spur US demand. Retail prices averaged $2.43/USG in 2015, lower by 93¢/USG from the previous year. EIA expects gasoline prices to drop another 40¢/USG to average $2.03/USG in 2016 — what would be the lowest average since 2004.
Vehicle fuel efficiency will curb continued fuel consumption growth in 2016, the agency said. Average fuel economy of new vehicles sold in 2007 hovered near 20 miles per gallon during that record consumption year, compared to a more than 25 miles per gallon average in 2015, based on University of Michigan Transportation Research Institute data.
But fuel efficiency also went backward for the first time in seven years of University of Michigan data. Fuel economy for new vehicles sold ended the year lower than in 2014 as cheap prices led consumers to pay less attention to efficiency.
Gasoline was not the only fuel facing potential pressure from fuel efficiency. The EIA expects improving aircraft fleet fuel economy to cut jet fuel consumption to fall by roughly 10,000 b/d to 1.53mn b/d in 2016 before recovering the following year.
Distillate fuel sales last year fell by 80,000 b/d to 3.96mn b/d. Lower heating oil demand helped to drag down consumption. The EIA expects distillate demand to restore that consumption in two years.
