Gasoline Demand Destruction Accelerates Despite Plunge in Prices: Consumption Drops to August 1997 Level | Wolf Street

This demand destruction caused by sky-high gasoline prices is happening on a global scale. It’s where price resistance has set in, and people have changed their behavior a little here and there. They cut out unnecessary trips. They’re prioritizing their most fuel-efficient vehicle in the garage. When they buy a vehicle, fuel economy is moving up as a decision factor. Working from home has become sticky, and fewer people are commuting to work every day. And for vacations, people might have chosen to go places that involve less driving

EV sales are booming, with long wait lists and consumers willing to pay whatever. So EVs are starting to have some impact on gasoline demand, but it’s still very small.

Rather than relying on growth in the US, refineries turned into big exporters of gasoline, diesel, jet fuel, and other petroleum products. Even the refineries in the San Francisco Bay Area are importing crude oil and are exporting refined product to Mexico and further south.

In the middle of the night, electric utilities sit on huge amounts of idle and very costly capacity, and this is when EV owners are encouraged to charge their vehicles because electricity prices are lower and people with garages can just plug them in overnight. Utilities are licking their chops because they too, like refiners, have been stuck in a stagnating business, as consumers, businesses, and municipalities have invested in more efficient lights, appliances, HVAC systems, and equipment.

Gasoline Demand Destruction Accelerates Despite Plunge in Prices: Consumption Drops to August 1997 Level | Wolf Street