Gasoline demand in America has peaked according to government forecasts. American drivers are using less fuel due to more efficient engines and the onset of a critical mass of electric vehicles. There is still a huge demand for gasoline, and the current levels of fuel sales are historically quite high. But as electric cars replace ICE vehicles, there will be a steady erosion in the amount of gas user per mile.
US fuel economy for 2022 will be a record: up to 26.36 miles per gallon. Vehicles that run on full or partial electricity are poised to account for more than 17% of US auto sales (which is up from 3.3% six years ago). Predictions are that consumption of gasoline will slump by about 15% by 2027.
An interesting aspect of this trend is the effects it is having on the supply side of the market. Oil refiners have little incentive to ratchet up output at their facilities. Why would you spend money to update these facilities when the market for the product is steadily declining? Throw in a pandemic which massively disrupted operation, and the volatility of the recovering marketplace, and you’ll see more and more disruptions and supply issues in the years ahead. It will take decades for ICE cars to fully disappear from our roads, but the fuel suppliers and the corner gas stations may have moved on much sooner than the drivers who stay with ICE vehicles.