Low Gasoline Prices Fueling Surge in Popularity of SUVs
U.S. drivers are buying gasoline at a feverish clip despite the recession, largely because of low pump prices and an autumn buying rush for gas-guzzling sport-utility vehicles and big pickups, analysts said.
“Americans are driving more in less-efficient vehicles,” auto analyst Mike Lucky of John S. Herold Inc. said. “Sales of SUVs and pickup trucks have been amazingly strong considering the recession, and low pump prices are keeping people on the roads.”
Gasoline consumption for November averaged about 8.6 million barrels a day, up nearly 3% from last year despite the recessionary economy, according to the American Petroleum Institute.
The robust gasoline demand comes amid a steep drop in U.S. average retail pump prices to a two-year low of $1.095 a gallon and a dramatic increase in sales of some of the least fuel-efficient vehicles on the market.
Bargain financing deals by many of the major auto makers have helped push sales of light trucks--SUVs, pickups and minivans--14% higher than last year for the month of November, according to industry and government data.
Fully half of the 20 best-selling new passenger vehicles this year have been trucks, including the mammoth GMC Sierra and Dodge Ram pickups, according to data reported by auto makers.
“The rate of purchase for new fuel-inefficient vehicles is far outpacing the rate of retirement for older automobiles,” Lucky said.
In October, the Environmental Protection Agency said Americans’ love affair with SUVs reduced the average fuel mileage of all model-year 2001 vehicles to 20.4 miles per gallon, the lowest in two decades.
The trend could become a curse on the country’s energy infrastructure, which in the last two years has struggled to overcome regional fuel shortages caused by refinery and pipeline outages.
“The lowest fuel economy since 1980 can be attributed to the increase in light trucks on America’s roads,” the EPA said.
The current corporate average fuel economy standards, first adopted by Congress in 1975 after the Arab oil embargo, require passenger cars to average 27.5 mpg and light trucks 20.7 mpg.
At the time, light trucks were allowed to get less mileage because they were used mostly by farmers and small businesses.
If auto manufacturers increased fuel economy by as little as 3 mpg, the EPA said, consumers would save as much as $25 billion a year in fuel costs.
That modest increase in fuel efficiency, the agency said, would reduce carbon dioxide emissions by 140 million tons a year and cut U.S. reliance on foreign oil by 1million barrels of oil a day--a boon as tensions in the Mideast raise fears of a supply disruption.
Senate Democrats have introduced a broad energy bill that seeks, in part, to boost vehicle fuel efficiency but said any change could not take effect until 2004. The bill does not set specific fuel mileage requirements; that would be added after the Senate Commerce Committee approves a new standard, they said.
