The Perks of Pump Avoidance
Higher gasoline prices are cleaning out the wallets of motorists, but there may be a silver lining. Traffic is somewhat lighter on the heavily congested freeways and surface streets of Southern California .
It only makes sense that the sharply higher prices at the pump are leading some people to avoid discretionary trips with their cars, carpooling when possible and shifting to public transportation.
Although there are no hard data yet, a broad range of experts say there is evidence that people are buying less gasoline and finding ways to avoid using their cars, contributing to less congestion on the roads.
“We have noticed that volumes are lighter than normal,” said Frank Quon, deputy director of Caltrans freeway operations for Los Angeles County. “We haven’t done a study. But we aren’t experiencing as much congestion, and travel times are shorter,”
Meanwhile, Southland public transportation agencies are reporting that ridership has jumped in the first months of 200S-up between 3% and 12%, depending on the system.
Anecdotally, a lot of peoplel talk to say they are seeing the effect every day, which has cut their commute times dramatically. Normally jammed freeways are mysteriously wide open.
If people are indeed cutting back on driving, avoiding discretionary trips, carpooling and using public transportation, it should mean that gasoline sales volumes are dropping .
John Felmy, chief economist at the American Petroleum. Institute, the Washington, D.C. trade group that represents the oil industry, says that wholesale deliveries of gasoline across the nation are down slightly.
Gasoline prices are up 51 cents a gallon this year across the nation, averaging $2.24 per gallon, Felrny said. That’s a 29% increase in price .
In the short term, consumers do not significantly change their drivirig habits when gasoline prices rise. In economic terms, the’ relationship of prices to sales volume is known as demand elasticity a 50% increase in price, for example, leads to a 5% drop in demand, according to Felmy.
Using that relationship, the 29% increase ‘in gasoline prices this year should lead to a 2.9% drop in gasoline sales volume. It’s t06 early to tell, however, whether that has happened.
During the long term, consumers make bigger adjustments, reducing their consumption so much that total spending for gasoline stays flat.
During the energy crisis of the 1970s, consumers made few immediate adjustments. but by the early 1980s they were trading gas guzzlers for fuel efficient cars.
Another major adjustment is likely these days if gas prices remain high, as most oil experts expect. In the meantime, motorists are getting the benefit of spending somewhat less time on congested freeways.
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