True Insights on Fuel Demand by Ticon Analytics Team | Is Decline Real?

    Over the past two years, we have been hearing from everywhere about the decline in fuel consumption in the USA. The primary reasons are thought to be the electric vehicle boom, the rising fuel prices, and constantly improving fuel efficiency. These arguments are hard to dispute. Over the last three years, the number of EV purchases has been steadily increasing (Table 1).

    Table 1. Vehicle purchase in the US, units

    Impressive! In certain months, traditional gasoline vehicle purchases plummeted by 18.68%, while the acquisition of EVs or hybrids saw an astronomical surge of 52.34% when comparing 2020 to 2021.

    But the burning question remains: Has this trend genuinely translated into reduced fuel consumption, and if so, to what extent? Ticon embarked on a journey to unravel the enigma, compelled by the increasingly bewildering array of data.

    Our research into this intriguing subject was guided by the official data from the U.S. Energy Information Administration. Here’s the chronicling annual gasoline consumption and the average daily fuel consumption in Table 2.

    Table 2. The average daily consumption of fuel, thousands of barrels per day

    In our quest for answers, we discovered that, in the grand scheme of things, 2022 witnessed a marginal dip of a mere 0.06% in fuel consumption in comparison with 2021.

    From the table, it can be seen that fuel consumption overall has remained fairly constant from year to year, with changes not exceeding 1%. Considering that fuel economy per mile is decreasing, not only due to EVs but also due to the continuous improvement of traditional cars, the stability of overall fuel consumption in the country is evidently linked to an increase in the distance traveled by vehicles. Our assumptions are supported by data from the U.S. Department of Transportation and Federal Highway Administration. Cumulative Travel for 2023 changed by +2.4% (+43.1 billion vehicle miles), with some regions showing growth exceeding 4%. Ticon's research shows that the increase in travel activity on weekends is often higher than on weekdays. It appears that people are spending more time on the roads in general.

    At the same time, naturally, there is a growing demand for "non-fuel" services at roadside facilities and in retail in general. And since fuel consumption remains constant, its share in the trade balance, such as convenience stores with gas stations, naturally decreases. So, in the title of the article "Declining Fuel Demand Requires Fresh Thinking", we would change the words "Declining Fuel Demand" to "Changing fuel share." It's evident that a change in understanding the demand situation requires different strategic decisions from convenience store owners. In other words, fresh thinking is productive only if it is based on verified and relevant data, which Ticon always strives for.

    Verified data is what we provide to our clients in our reports in a ready-to-decision-making format for tasks such as location selection and location analysis, advertising placement, operational improvements, employee scheduling, and many other tasks.

    And we are pleased to share our insights, findings, and reflections with you, dear visitors, in our regular blogs.


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