The International Energy Agency said gasoline prices in the United States, which is $4 a gallon, would be leading to an annoying summer driving season.
They said, “At $3.7 a gallon in April, retail prices are now well in the $3-$4 gallon threshold that typically triggers a fall in vehicle-miles traveled. We believe gasoline demand will indeed disappoint this year — rising seasonally but nonetheless declining on a yearly basis if retail prices remain at current levels.
According to the Paris-based agency, the estimated fell down of U.S. demands was about 2 percent of the year-on-year on average in March and April.
They also said that weekly-to-monthly changes in the previous two months may mean gasoline demand has been persistently overstated by preliminary data. This could count exports as domestic deliveries.
The International Energy Agency would still be expecting reduction in discretionary driving as the gasoline demands could still be supported by the constant economic recovery, increase in employment, and the still-weak new vehicles sales of more energy efficient cars.
“Anecdotal evidence points to increased internet shopping, partly shifting demand from gasoline to freight-related diesel, which is more price inelastic,” it said.
photo credit: cleveland.com