Gasoline demand in the U.S. may have peaked last year, as record prices cause motorists to drive less and buy more fuel-efficient cars, consulting organization Cambridge Energy Research Associates said in a report.
Demand “will likely” decline in 2008 for the first time in 17 years, the Cambridge, Mass.- based company said Thursday. Cambridge is a subsidiary of Douglas County-based IHS Inc.
“If petroleum prices stay at or near their current levels, 2007 could prove to have been the peak year for U.S. gasoline demand,” the report said.
Unlike the late 1970s and early 1980s, when people bought smaller cars and reduced gasoline consumption until oil prices fell, demand reduction may be permanent this time, Samantha Gross, associate director on CERA’s global oil team and an author of the report, said in a telephone interview.
“We think it’s a paradigm shift,” she said.
New fuel-efficiency mandates for vehicles that take effect in 2011 will become increasingly stringent, and global-warming concern is encouraging people to conserve regardless of the price of gasoline, Gross said.
Regular gasoline at the pump rose to a record average of $4.08 a gallon Monday, according to AAA, the biggest U.S. motoring organization.
Demand for gasoline in the four weeks ended June 13 was 1.8 percent lower than a year earlier, a U.S. Energy Department report this week showed.
Because incomes have risen, pump prices are not causing the same “economic pain” as they did during oil-supply disruptions in the early 1980s, CERA said.
“Such a ‘pain point’ would be an annual average price of just over $4.20 per gallon,” according to CERA.
