In 2017, American gasoline consumption fell for the first time in five years, according to a new report by Bloomberg.
While it was a fall, the fall was quite small—government figures show that consumption was down by just 0.0006 percent compared to 2016. The demand reduction occurred in the first quarter, corresponding with the inauguration of President Donald Trump.
According to Bloomberg, illegal immigrants started driving less after Trump took power for fear of apprehension by immigration officers. Rising oil prices also contributed to lower demand. The average gallon costed $2.39 in 2017, versus $2.12 in 2016, Bloomberg said.
The Energy Information Administration (EIA) predicts that demand for gasoline will rise again in 2018. This year, Americans should fill their tanks with 9.33 million barrels per day, and by 2019, that number will rise to 9.4 million barrels per day.
A potential gas tax increase could challenge the EIA’s figures, however. Recently Democratic Senator Tom Carper of Delaware said that President Trump was floating the possibility of a fuel tax increase of 25 cents per gallon to pay for his new infrastructure plan. If enacted, this would be the first increase in the federal gasoline tax since 1993.
Last month, the U.S. Chamber of Commerce called for a modest increase in the federal fuel fee, because inflation and vehicle fuel economy have eroded its value since it was last raised back in 1993. Related: Oil Prices Head Lower As Crude, Gasoline Inventories Rise
“Increasing the fee by a total of $0.25 cents, indexed for inflation and improving fuel economy, would raise $394 billion over the next 10 years,” president and CEO Tom Donohue said.
Republican chairman of the House Transportation and Infrastructure Committee, Rep. Bill Shuster of Pennsylvania, has recently called upon GOP colleagues to consider dropping their opposition to the tax hike.
By Zainab Calcuttawala for Oilprice.com
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