By on May 1, 2015

Las Vegas Standard Station Circa February 2013

With fuller wallets and lower prices at the pump, millennials are leading the charge toward the highest consumption among Americans since 2007.

AAA says motorists under 35 are nearly twice as likely to report increased driving than those above 35 because of the drop in gas prices, Chicago Tribune reports. The motoring group noted 13 percent of all drivers – 19 percent of drivers 18-34, 10 percent of those 35 and over – are putting more miles on their vehicles as a result of said decreases, which have fallen by $1 per gallon compared to last year.

Though oil companies blamed millennials for using mass transit and living in the city as two of the reasons for low demand for their offerings, they may soon have them to thank for reducing the glut in the supply chain – strengthening prices in so doing – as transportation analyst Alan Pisarski explained to the newspaper:

That millennial who didn’t even bother to get a car because they knew they couldn’t afford to buy it or the gasoline to drive it can now afford to go to the movies, afford to go to the beach, afford to go places with friends. Because of the economy coming around and fuel prices decreasing, they’re beginning to be able to afford these things again.

Demand for gasoline in the U.S. this year is expected to average 9.07 million barrels/day, compared to 8.92 million/day in 2014, as a result of lower prices at the pump. However, AAA says 17 percent believe $2.50/gallon is cheap while 39 percent claim it’s still too much; 58 percent agree $1.50/gallon is cheap.

The low prices have also affected wallets this year by adding $400 to each household’s bank account. The savings may come in handy on vacation or other long-distance travel: 6 in 10 Americans are more likely to drive 50 miles or more, with 68 percent of those under 35 making those plans compared to 57 percent 35 and over.

[Photo credit: Minale Tattersfield/Flickr/CC BY-SA 2.0]

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26 Comments on “AAA: Millennials Drive Increase In US Fuel Consumption Amid Low Prices...”

  • avatar

    I’m so tired of these analysts, shouting about what millennials are doing at every turn in the economy. And it always suits whatever point they want to make, with little basis in reality.

    Look at the guy’s quote up there. If I didn’t have enough money for a car or fuel a year ago, I’m not going to -suddenly- buy a car and drive all over this year just because fuel costs $1 less per gallon. That’s absurd. I was obviously using all of my money before and didn’t have enough left over for car stuff. Now since gas costs less I magically have thousands more dollars and a -reason- to drive all over?

    I had adjusted my life in order to not need a car before, and that’s a big deal. It’s not something I give up so easily with the sways of the commodities market.

    Get over yourselves, analysts. You suck.

  • avatar

    Where are Chevron stations badged as Standard instead? I thought the Standard Oil name had gone away.

    • 0 avatar

      Las Vegas, apparently.

      • 0 avatar

        It’s a compliance exercise!

        “Chevron is the owner of the Standard Oil trademark in 16 states in the western and southeastern U.S. To maintain ownership of the mark, the company owns and operates one Standard-branded Chevron station in each state of the area. Additionally, Chevron owns the trademark rights to Texaco and Caltex fuel and lubricant products.”

        I feel like a Standard Oil station should look very serious and be in the Art Deco design format. Black and gold.

  • avatar

    So millennials don’t drive because they have crappy jobs and cars/gas cost a lot? In other news, water is wet.

    BTW, the financial press are reporting that the Saudis are burning through foreign cash reserves at an astonishingly fast pace. Don’t expect to see gas prices remain low for much longer.

    • 0 avatar

      It’s kind of nice because the more these reports make millennials look down and out and terrible, the better I look. Ha.

    • 0 avatar

      They’re not low any longer. $3.70/gallon regular unleaded in LA.

      • 0 avatar

        That’s the California mandates. There’s nothing cheaper than $3.43 in San Diego (and several stations are over $4), but where my sister lives in Massachusetts, the price is $2.58. It’s not all gas tax differences, Cali refineries jack up the price after their Spring maintenance and change over to the mandated Cali special Summer blend.

        The Cali blend is not only more expensive to make, its use prevents cheaper gas from being brought in from other states. Gas prices under $2.30 can be found in Yuma and Tucson, with Phoenix prices below $2.50 available. Nevada averages $3.01, with $2.78 available in Las Vegas and about $3.15 in Reno. Meanwhile, in Texas…

  • avatar

    I don’t know if it’s the analysts or if it’s the journalists who don’t understand the data and analysis. Regardless, the information media complex publishes ridiculous narratives about the under-35 demographic.

    In the 1960s, everyone thought perma-stoned hippies were going to turn the US into a communist paradise. They ended up voting for Reagan. The narratives are rarely on point.

  • avatar

    Is that a T100?
    I know our 1000 mile road trip occurred because of the $1.50 drop in gas prices…

    • 0 avatar

      That’s a circa 94 Tacoma. The T100 always looked Land Cruiser-ish, and never got the thick vertical grille bits just inside the headlamps.

  • avatar

    Damn. Only .20 a gallon difference between regular and premium. There are Shell stations in Ohio that charge nearly .60 difference!

    • 0 avatar

      The stations probably figure, if you can afford to own/lease a Mercedes or Beemer, you can afford the required premium.

      • 0 avatar

        Gas stations make very little money on selling gas. If you ignore the convenience store, then your transaction will probably barely be little above breakeven.

        Refiners and gas stations like lower gas prices, since demand goes up and their margins are low. It’s the oil companies that lose out when prices fall.

        • 0 avatar

          The gas pumps are the loss leader to get you into the store. Stand-alone gas stations made a couple cents per gallon, but oil companies usually own a piece of the convenience stores connected to them. Look at Arco, Circle-K, Cumberland Farms in the northeast – the stores own the pumps, and some, like Cumberland Farms, actually owns branding rights to the gas.

          Those stores are getting bigger carrying more than soft drinks and junk food for travelers. In many urban areas, they serve as neighborhood grocery stores, so gas is just another low margin product, like a can of peas. They can charge Beemer Boy an extra 30 cents for premium, since they don’t carry artisanal, organic, free range bread.

          • 0 avatar

            I’m sure if varies but if you look at the RBOB and then add in applicable taxes in my area there is still a roughly 30 cent markup, which at 3.00 all in is a ten percent margin. I once asked a classmate in 2004 what his family’s gas station paid for gas when they purchased it. He said they were paying $1.94 (inc all taxes) and the pump price at the time was $2.19. He followed this up with the credit card companies would take about 20 cents a gallon when used however cash deals still netted that 25 cents. So your reasonable margin but low profit to the reseller is really the result of bankster criminals yet again.

          • 0 avatar

            The premium costs them more, too — it really does cost more to produce a gallon of premium than a gallon of regular. And demand for premium is falling, so it presumably remains longer in inventory than it once did.

            The stations aren’t benefiting much, if at all, from the higher price of premium.

  • avatar

    When college time came, it was a shock. You do realize rack rate for a first tier private college is 60k/year, before add ons. Private in state is a mere 25k/yr. It is three times more, adjusted for inflation, than my parents paid for a first tier private school

    I don’t think that most older folks, ie those running things, really get how much a new grad is behind before they begin.

    Cars ? Oh, they like them and know them, but you have rent and a student loan payment that looks like rent. This wasn’t the case in the 60’s, 70’s and 80’s, but it is now.

    Having said that, I know a millenial who just bought a house with her SO and a Yaris, so she defies and confirms at once.

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