The Changing Face of Gasoline Demand
The global COVID-19 pandemic has caused a sharp decline in consumer demand for gasoline. Commuters who typically filled their tanks on a weekly basis are no longer commuting and discretionary travel has screeched to a halt. However, when you eliminate the global pandemic from the picture, you’ll see that there’s been a long-term decline in demand that’s put pressure on many players within the gasoline supply chain. According to a study of gasoline demand published in late 20191, U.S. gasoline demand has been declining steadily, even though miles driven have continued to rise and GDP growth has remained strong. These factors would normally point to an increase in the demand of any product but that’s not been the case with gasoline. There are several fundamental trends impacting the demand of retail gasoline in the face of increasing miles driven and a strong economy. These factors will also have an impact on the supply chain partners that service this vital part of our economy. According to a recent article published by Boston Consulting Group (BCG)2 there are some deep trends underway:
- The penetration of alternative fuels into the automobile market, especially electricity.
- The changes in mobility that are being driven by ideas like ride sharing, car sharing and autonomous vehicles in an increasingly urban population3,4.
- Increasing demand for heightened customer experience5.