Gasoline prices have hit a new (nominal) high. The impact on the driving and the economy depends in part on the intensity of use of gasoline and diesel.
Source: EIA via FRED, accessed 2/24/2022.
Fuel economy for conventional vehicles has been rising over time, as has the presence of electric vehicles. What does this imply for the ratio of vehicle miles traveled (VMT) and fuel used (actually, supplied)?
Figure 1: Vehicle miles traveled ratio to fuel use, 000’s miles/barrel (black). Fuel is barrel of gasoline plus 1.3xbarrel of diesel. Log linear trend (red), both on log scale. NBER defined recession dates peak-to-trough shaded gray. Source: DOT/FHA via FRED, EIA, NBER, and author’s calculations.
As of end-2021, the ratio of miles traveled to fuel use is about 6.5% higher than it was in January 2000. (Obviously, this number does not control of types of vehicles, and how intensively those different types of vehicles are used).
The underlying data series are shown below:
Figure 2: Vehicle miles traveled ratio to fuel use, millions of miles (black, left log scale). gasoline supplied, 000’s barrels (blue, right log scale), diesel supplied, 000’s barrels (teal, right log scale). NBER defined recession dates peak-to-trough shaded gray. Source: DOT/FHA via FRED, EIA, NBER.
An aside: While the nominal gasoline price is at a record high, the real gasoline price component of the CPI is not.
Figure 3: Ratio of CPI gasoline component to Core CPI (blue, log scale). NBER defined recession dates peak-to-trough shaded gray. Source: BLS via FRED, NBER and author’s calculations.
And the share of gasoline and other fuels in personal consumption expenditures is higher than in the recent past (graph below, through 2021Q4), but a lot lower than in 2012-13.
Figure 4: Share of personal consumption expenditures accounted for by gasoline and other energy goods (dark blue). NBER defined recession dates peak-to-trough shaded gray. Red dashed line at 2000Q1 (sample beginning for Figures 1-3). Source: BEA, NBER and author’s calculations.