The stay-at-home orders promulgated by state and local governments drove U.S. demand for gasoline down by around 30% over the six-week period between mid-March and the end of April. A new survey indicates that the gradual reopening of the economy has recouped about two-thirds of that loss.
Analysts at consumer travel company GasBuddy used data gathered daily from Americans who use the firm’s Pay With GasBuddy app to determine how the increased movement of Americans has affected the demand (and, hence, the price) of gasoline.
On April 12, gasoline purchases were down 62%, compared to March 13, 2019, the day last year that exhibited the greatest demand for gasoline. Demand in the last week of April was up 22% compared to the week of April 5, the weakest period for U.S. demand this year.
GasBuddy CEO Sara McCrary explained, “Fuel demand is a significant economic indicator. While April fuel demand was down compared to March, we saw consecutive weekly increases in gallons purchased and the number of active cardholders as the month progressed.”
Average demand for gasoline dropped from 50 gallons per driver in April 2019 to just 39 gallons this past April. The COVID-19 pandemic drove a peak drop of 41% in year-over-year fuel demand during the week of March 29. By the end of April, the decline had shrunk to 31% year over year.
GasBuddy expects demand to continue rising as more states reopen and employees return to work. The analysts even expect summer travelers to begin hitting U.S. highways. School closings for the remainder of the academic year may pull some travel forward.
Some of the nation’s most heavily visited attractions are beginning to reopen. The Wyoming entrances to Yellowstone National Park will reopen on Monday, but social distancing rules and other limitations will remain in force. Disney Springs, part of the Disney World resort in Orlando, Florida, will reopen on May 20, with similar restrictions.
Will gas prices rise? Patrick DeHaan, head of petroleum analysis at GasBuddy, commented, “The increase in fuel demand will heavily rely on how quickly additional states reopen. Given that gas prices will continue to be affordable, we could continue to see weekly single digit increases throughout the month of May, with a significant increase possible if the situation improves more rapidly.”
Gas prices have risen by about three cents a gallon since Monday. Thursday’s national average price is about $1.86 a gallon. Hawaii has the most expensive gas ($3.30 a gallon), while Oklahoma has the cheapest ($1.48). Gas prices exceed $2.00 a gallon in only 10 states.