Consumers Rethink Their Driving Habits

Strapped for cash, motorists are filling up halfway to make it to their next paycheck.

June 10, 2022

Car almost out of gas

ALEXANDRIA, Va.—The national average cost for a gallon of gasoline is a record-busting $4.98, according to AAA, and Americans are feeling the pain. AAA took care of 50,787 out-of-gas calls in April, a 32% increase from the same month last year, the Washington Post reports.

Filling up a tank for some consumers cost more than $100, which is 14 hours of after-tax income for certain low-wage workers. The high cost of gas combined with food and housing cost increases has Americans weighing how to spend their money.

The Consumer Price Index hit a 40-year high of 8.6% in May, driven by skyrocketing energy and grocery costs, according to U.S. Bureau of Labor Statistics data released today. Grocery prices were up 11.9% in May compared with a year ago, while energy prices were up 34.6%.

A Washington Post poll showed that 44% of respondents between April 21 and May 12 said they have only partially filled their car’s gas tank, and that number jumps to 61% for drivers with incomes below $50,000. Drivers are making more frequent trips to gasoline stations to top off their tanks instead of filling up all at once.

“They want to fill up a certain amount in dollars, and it just doesn’t go as far,” Andrew Clyde, CEO of Murphy USA, told The Wall Street Journal.

The Washington Post poll also found that more than six in 10 drivers are choosing to drive less, and three in 10 said they are driving at reduced speeds. The demand for gas dropped to 8.8 million barrels a day for the week ended May 20, and excluding 2020, that the lowest level for that time of year since 2013.

“I find myself not doing things I used to with the kids because of the gas prices,” Alina Hille, a therapist for a nonprofit interviewed by the Post. “We used to go for drives when they are restless or try to drive to playgrounds, or destinations they haven’t been to before.”

Now, she says, “I’d rather buy groceries.”

However, there is a tipping point to where consumers will change their spending habits, and short-term price increases don’t impact habits. However, sustained increased can affect behavior, Roger Ware, an economist with Queen’s University in Ontario, told the Post.

“People will maintain their driving habits in the short term because they do not see an alternative to meeting their goals, whether for commuting or recreational driving. Over a period of months or years, however, many things will change if prices stay high,” Ware said.

Lucas Davis, an economist at the University of California, Berkeley, told The Wall Street Journal that a 10% increase in gasoline prices brings a 2% to 3% drop-off in fuel consumption.

Since last Thursday, AAA says these 10 states have seen the largest increases in their averages: Michigan (+41 cents), Delaware (+37 cents), Maryland (+36 cents), Colorado (+36 cents), Kansas (+34 cents), Indiana (+33 cents), West Virginia (+33 cents), Minnesota (+33 cents), Iowa (+32 cents) and Wisconsin (+31 cents).

The Convenience Matters podcast episode “What’s the Tipping Point for Gas Prices?” explores how much pain at the pump that consumers will tolerate and what’s ahead for the summer driving season.

Here’s why relief at the pump is nowhere in sight, and a recent NACS’ blog post, “Is Gas Tax Relief a Good Idea?” discusses how easing consumer pain at the pump is a good idea, unless it causes more problems.

Also, here’s what consumers should know when gas prices soar.