Publications: Notes at the Margin

The 2021 Gasoline Boom (April 19, 2021)


Get ready. Gasoline consumption will surge this summer. Diesel use may rise sharply as well. The increases will occur even if a new wave of the Covid-19 pandemic causes Americans to stay home and avoid travel. Friday, April 16, the US Census Bureau produced data that assures a fantastic season for motor fuels.


It is all about housing starts and construction. A myth abounds that the summer fuel use cycle depends on American families’ road trips. This belief is a fiction that we have tried to dispel often. Here, our goal is to slay it once and for all.


The falsehood arises because the summer vacation cycle coincides with another: the construction cycle. Families take vacation trips during the summer because there is no school and the weather is good.


As it happens, contractors also take advantage of the season. Housing construction ramps up during the summer months because the daylight hours are longer and because it is easier and less expensive to build when it is warm. The data reveal a close linkage between fuel consumption and the construction cycle. As we will show in several charts, the links hold for all parts of the United States with some regional differences.


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