More Than 1 Billion Gallons : California Gas Consumption Hits All-Time High in April
California motorists responded to lower prices in April by setting a second straight monthly record for gasoline consumption, the state Board of Equalization said Friday.
Distributors sold more than 1 billion gallons to service stations and others during the month. The tax-collection agency called it a “sizable” 5.2% increase over April, 1985, when prices were sharply higher.
March, the first period in which the plummeting price of crude oil was substantially reflected at the gas pumps, also established a record for the month with just over 1 billion gallons distributed in California.
However, weaker sales in January and February--blamed partly on floods and other poor weather conditions in the state--held the total for the first four months of this year to just 1% above the year-ago level.
Analysts said the March and April records in California, the nation’s biggest consumer of gasoline, support forecasts of a big increase in overall driving this year as a result of the unprecedented decline in gasoline prices since Jan. 1.
If May’s results exceeded April as they normally do, said board Chairman Richard Nevins, it will be the first time since 1978--just before the huge 1979 run-up in prices--that California motorists used more than 1 billion gallons of gasoline for three months in a row.
However, a recent unseasonal decline in prices as the Fourth of July holidays approach suggests that current demand for gasoline is not as high as some expected, according to Dan Lundberg, publisher of the Lundberg Survey of gasoline prices nationally.
A 1 1/2-cent-a-gallon decline is “extraordinary” at this time of year, Lundberg said Friday. “A lot of people think we’re on the verge of a big driving boom in California, and this may well be true. But I would have thought that the serious fall in prices would have developed a greater increase in consumption than we’ve seen so far.”
As crude oil prices have plummeted from about $31 per 42-gallon barrel to about $13 today, gasoline prices have dropped from $1.21 at the start of the year to today’s national, sales-weighted average of 95.6 cents a gallon, according to Lundberg.
In California, that includes about 24 cents in state and federal taxes--9 cents a gallon in both state and federal excise taxes and a 6% sales tax.
While state excise tax revenue has increased because more gasoline is being sold, tax officials said the state will realize less gasoline-based revenue overall because the sales tax is a percentage of a sharply lower price.
California is normally the first state to report gasoline usage based on tax revenue. It is the best available measure of the volume of gasoline being sold to consumers and thus is considered more accurate than estimates of nationwide demand based on transfers of fuel out of primary storage tanks.