A new report published by the American Petroleum Institute has found that that not only is the demand dropping for the year, but it also sits at the lowest level recorded for a decade. As a result of slow sales at the pump, energy giants are feeling the hurt as well, with gasoline production decreasing by 2.3 percent for the month of July 2011 compared to the same month of last year.
“Consumers aren’t spending, and jobless claims have increased, so it isn’t surprising gasoline demand was down and overall demand slipped a bit,” said API Chief Economist John Felmy.
US unemployment was 9.1 percent for the month of July, which is down from last year’s 9.5 percent. Yet the figure shows little improvement over results in May and June. No figures for the rate are available for this month, but new claims have increased.
However, Auto Observer points out that a change in driving habits is also to blame and might be here to stay. "We have been in an economic soft patch this summer. There is quite likely decreased demand for driving vacations and other non-essential driving due to higher gas prices since late February and due to still weak economic conditions," said Edmunds.com Chief Economist Lacey Plache.
Americans are also increasingly going for four-cylinder engines instead of V6s in their sedans and V6s instead of V8 in their big pickups. Even compact cars like the Ford Fiesta are seeing increased demand.
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