By Dr. Steven Weisbart, Chief Economist, Insurance Information Institute
The U.S. Energy Information Administration (EIA) publishes extensive data on petroleum production, refining and supplies to users, with some data provided on a weekly basis. Gasoline supplied to retailers is not quite the same as gasoline consumed but it is close. And gasoline consumed is not exactly the same as miles driven but it is close. Consequently these data can indicate how much people are driving, sooner than we get data on the frequency and severity of collisions. Still, one benefit of tracking these data is that they are published in a timely way.
As a baseline, consider gasoline supplied in the first 12 weeks of 2020, compared to the comparable weeks in 2019 (Figure 1). Although this comparison can be affected by changes in prices from year to year as well as changes in weather (and possibly other differences between the two periods), we can assume that these differences are small and do not obscure longer-term trends.
The graph shows some week-to-week variation, but basically the same—or maybe a little less—gas supplied in 2020 vs. 2019.
Then the pandemic—and the start of the recession caused by fighting it—happened. Driving was sharply curtailed, and auto insurers instituted programs for refunding premiums to reflect this change. Figure 2 adds to Figure 1 the percentage change in year-over-year supplies of gas for the rest of March and all of April 2020.
But in May some states began relaxing various restrictions, and driving began to return to near-pre-pandemic/recession levels, as Figure 3 shows.
At this point there is no way to know what caused this spike in gas usage, but some speculate that any or all of the following could be responsible:
• States are moving to more permissive stages of lockdown, resulting in more travel, especially to beaches and other outdoor activities
• People who once took public transportation are now choosing to drive, thereby lessening exposure to the virus that might result from travel on mass transit
• Warmer weather months are traditionally a time for more driving
• The price of gas continues to be unusually low, making driving less burdensome than the prior year.