Demand for Gasoline Rebounds

Traveling by car is an easier way to maintain social distance than flying or taking a train. 

May 12, 2020

ALEXANDRIA, Va.—The demand for gasoline is rebounding, as the car—at least for now—makes a comeback. Areas around the globe are reopening, and driving has emerged as the social-distancing transportation mode of choice. That is providing some relief to an oil market fresh off its worst crash in history, reports Bloomberg.

In the United States, gasoline consumption is clawing back from record lows, rising by 400,000 barrels a day during the week ended May 1. Cities in Florida, one of the first states to re-open, have seen fuel sales rebound to 3% below normal levels, from 50% a few weeks ago, reports the Florida Petroleum Marketers Association.

“I think maybe we will get a third of gasoline demand back relatively easy,” Patrick DeHaan, analyst at GasBuddy, told Bloomberg. The rest will come back much more slowly, he said, perhaps taking a year or more.

Gasoline demand may accelerate this summer as people change the way they vacation. In the U.S., demand for long-haul recreational vehicles has picked up as people choose road trips over air travel. Jon Gray, chief executive officer of RVshare, said bookings in some areas have more than doubled over last year.

At fuel distributor Pilot Flying J, management has noticed the trend. “People are thinking about their travel plans for this summer, and many are considering road trips due to people feeling more comfortable driving,” said Whitney Haslam Johnson, chief experience officer.

In Beijing, Shanghai and Guangzhou, morning traffic is now greater than in 2019, while subway use is well below normal, according to BloombergNEF. Volume on Beijing’s metro system is 53% below pre-virus levels. Subway usage in Shanghai and Guangzhou is down 29% and 39%, respectively.

“People are using their cars because they are afraid to use public transportation,” said Patrick Pouyanne, chief executive of French oil giant Total SA.

In Berlin, public transit use remains down 61%, while the number of people driving has recovered to 28% below normal, according to data from Apple, which tracks requests for directions on its popular Maps app. The same is occurring in Ottawa, the Canadian capital, where driving directions on the app have recovered to 40% of normal levels, up from 60% in April, while directions for mass transit remain flat from April at 80% below normal levels.

“At least at the beginning of our way back to normality, we expect a decrease in the use of public transportation,” said Josu Jon Imaz, the head of Spanish oil company Repsol SA.