Missouri fuel prices peak in June, demand drops a bit, more wealth leaves the state
I’ve been tracking fuel consumption over the past few months in light of rising fuel prices that have spawned an endless parade of stories of ‘pain at the pump’ and ‘record gas prices’ in the news. What we have really seen is the pain of captivity and an addiction to self record. With few options for most Missourians to accomplish trips by means other than driving, they are trapped.
NextSTL – Fuel demand in Missouri remains robust despite “high” prices
NextSTL – Near-record demand continues despite high level? gas price
NextSTL – Record Gasoline Prices Haven’t Depressed Fuel Sales in Missouri
The average price of gasoline in Missouri in June was around $4.60 per gallon, while last June it was around $2.75, an increase of 67%.
May and June were down from 2021, by 2.63% and 3.99% respectively. Perhaps prices have reached a high enough level to have an effect on demand. However, fuel sales since the start of 2022 are 2.24% higher than in 2021. For June, a 3.99% drop in consumption with a 67% increase in price for an elasticity of -0.06 shows how inelastic demand is in the short term.
The 2022 year-to-date is near the peak of the past 19 years.
The 2022 year-to-date is 3.1% higher than the average for the past 19 years.
The $1.85 per gallon increase over last year in June (2.5 cents was the gasoline tax increase over last October) with 356.2 million gallons sold means $659 million more spent on fuel with little added utility. It’s inflation. Everyone is aware of it this year. What’s even worse for Missourians who don’t own stock in oil companies is that since the state has no oil production and no oil refineries, almost all of that wealth has left state instead of circulating in the local economy. Missouri’s two largest metropolitan areas are among the top five for travel by private car. The state’s decades-long effort to socially engineer endemic car addiction is a drag on the state’s economy. This self-harm has made Missouri residents more vulnerable to volatile fuel prices and has weakened the economy.
Although we are at the mercy of state and local fuel prices, we control how we build places and the convenience of other modes of transportation. There is a glimmer of hope – e-bikes are gaining in popularity and completely replacing road trips and cars.
NextSTL – Electric Bike in St. Louis: Stories from Commuters and Electric Bike Shop Owners
Government policies, priorities and spending have played a significant role in creating the inelasticity we see. As election season approaches, be sure to ask the candidates what they plan to do to reduce your captivity to car and fuel prices.