Petrol / Diesel consumption....

[ecogeorge]

With the crazy price increases in petrol / diesel prices and the continued trend to electric EV .........are there any figures / evidence to the demand/trend/ consumption of prtrol/diesel ??
George.

[Stinsy]

Road fuel is taught in economics classes as having demand that is “entirely inelastic”. This means the consumption is irrelevant of price. That is why it is taxed so heavily, consumers cannot avoid the tax by using less.

However (as with much of what is taught in economics classes) that is bullshit!

As fuel prices rise, consumers modify behaviour by reducing discretionary travel (they visit family less and do less leisure travel), ride sharing for commutes, walk/cycle instead of using the car, etc.. Businesses too are pressured to become more efficient in their use of road fuel.

Here is a chart form ONS, you can see the downtick at the end showing the effect of rising prices. While the plunge in demand is notable, it is small so far. It takes a while for consumers to change behaviour and longer than that for this to result in reduced fuel sales (if you usually fill up once a fortnight but are reducing your fuel usage by half, it won’t show up in reduced sales until you skip your usual fill-up in 2 weeks time).