Institute for Energy Research: Drop in gasoline prices 'not enough to entice drivers back on the road’

The Institute for Energy Research (IER) recently determined that although a decline in demand and high inflation are causing gas prices to drop, Americans still feel they can’t afford to purchase gasoline on a regular basis.

“The stagnating demand this summer suggests that the recent drop in gasoline prices has not been enough to entice drivers back on the road,” IER said in a July 28 post on its website. “It appears that more people are not taking road trips in the summer of 2022 as daily life has become costlier with high gasoline prices helping to push inflation to 9.1% in June.”

The institute found that gasoline demand has decreased throughout the summer because “demand tends to be more elastic during the summer months than the rest of the year” and spikes in gas prices cause individuals to “forego trips and family visits.”

The IER noted that gas prices have exponentially dropped from a high of $5.016 per gallon. The AAA found gas prices, as of Aug. 7, stood at an average of $4.069 per gallon, lower than the summer peak but still 37% above last year and 70% above the average gas price when President Joe Biden was sworn into office.

In Texas, according to AAA, the average gas price is $3.572 a gallon. Houston averages $3.642 a gallon while Dallas and San Antonio average $3.482 a gallon and $3.497 a gallon, respectively.

From July 1-8, national gas consumption dropped 9.7%, all the way down to 8.73 million barrels a day, according to IER. This is the lowest seasonal demand in the last 21 years other than during the COVID-19 pandemic.

The inflation rate of 9.1% is the single highest inflation rate in more than 40 years, The Wall Street Journal reports.