Demand is Decreasing Amid High Fuel Prices

The price of gasoline has become so high that demand is decreasing just as the summer driving season begins. According to data compiled by Bloomberg from the Energy Information Administration, demand for this time of year has reached its lowest level since 2013, excluding the pandemic-outbreak period in 2020. Demand is down about 5% from the same time last year.

Prices at gas stations across the United States have risen to all-time highs in the last two weeks, dampening some hopes for a driving season that approaches pre-COVID-19 levels, as predicted by AAA. According to AAA data, the average gallon of gas in the United States was $4.59 on Tuesday, up about 51% from a year ago. Regular gasoline prices have never been this high. According to AAA data, prices in California can exceed $6.

The demand destruction caused by high gas prices may cause prices to rise even higher than previously predicted. According to a May 18 JPMorgan note, the average US gas price could exceed $6 per gallon this summer as the driving season begins.