Are American motorists finally changing their gas-guzzling ways?
As prices have neared and in some cases topped $4 a gallon, drivers have cut their consumption of gasoline to its lowest levels in a decade, driving less and buying cars that are more fuel-efficient.
The adjustment has slowed the climb in gasoline prices, which until last week had risen for 10 consecutive weeks, and could preserve some money for Americans to spend on other items as the economy struggles to recover more convincingly.
"Over the last four weeks, motor gasoline product supplied has averaged 8.6 million barrels per day, down by 4 percent from the same period last year," the Energy Information Administration (EIA) said last week.
The response to $4 gasoline is reinforcing a trend toward lower fuel consumption. This will be the third year in the past five with historically high oil prices. Even before the latest price spike, gasoline consumption had dropped 6 percent from 2007 through 2011, the EIA said.
The Federal Highway Administration adds that the number of vehicle miles driven over a 12-month period ending January was lower than in any year since 2004.
These may be signs that consumers are adapting to $4 gasoline, and may explain why retail sales are advancing in the face of high pump prices.
"I think that there is a little bit of a new mind-set that has happened with our customer over the last five years," Charles Holley, Wal-Mart's chief financial officer, said at a March retail conference. "I think $3, $3.30 whatever it is would have been a disaster, as you know, four or five years ago. Today, I think the customer has probably reset expectations and their budgets around that higher gas price."
With President Barack Obama's imposition of stricter fuel-efficiency standards, it's possible that U.S. petroleum use — which is mostly for transportation — has peaked and might decline gradually even as economic growth resumes.
That's good for people's pocketbooks.
Gasoline purchases made up 4 percent of total consumer spending last year, notes Mark Zandi, chief economist of Moody's Analytics. That's more than the 2.3 percent level when crude oil prices cratered in 1998, but it's a lot less than the 6 percent level in 1981 when an earlier oil price shock rocked the economy.
"I've been surprised, at least so far, that $4 a gallon hasn't done more damage," Zandi said. "So far, it doesn't seem to have done any." He said the improving job market was one reason. Another is that the warm winter lowered people's heating bills and balanced out total household energy costs.
Republicans could have a difficult time turning gasoline prices into a pivotal election issue, Zandi said. "My sense is that if this is the peak for the year, it fades as a political issue."
The trend toward more efficient cars is having a tectonic impact. A University of Michigan study this month said that the fuel efficiency of cars and sport utility vehicles sold last month jumped to 29.6 miles per gallon in a combination of city and highway driving, up 4 miles a gallon since October 2007.
Last month, General Motors sold a record number of vehicles getting 30 miles or more per gallon. Jim Cain, a GM spokesman, said that three years ago only 16 percent of the vehicles it sold got 30 miles per gallon; last month, more than 40 percent surpassed that level of fuel efficiency.