Washington, D.C. – The U.S. Energy Information Administration (EIA), a branch of the Department of Energy, has forecast a decrease of about 85,000 barrels per day (bpd) in the consumption of gasoline, diesel and other petroleum products in 2008 when compared with 2007. This represents the first year-on-year decline of gasoline in the U.S. since 1991.
The forecast is based on projections of weak economic growth and continuing high oil prices. The EIA is also forecasting a modest economic recovery and slightly lower petroleum prices in 2009, which will boost total consumption by about 200,000 bpd next year.
Gasoline prices are projected to increase to $3.54 per gallon (all prices U.S.) in 2008, compared with an average of $2.93 last summer, and that diesel will rise to an average of $3.73, compared with $2.85 last summer. Peak prices are forecast to hit just over $3.60 for gasoline and $3.90 for diesel. Diesel prices are expected to increase largely because of world demand, especially in Europe and Asia.
The report also forecast domestic ethanol production to increase to an average of 550,000 bpd this summer, as compared to 418,000 bpd during the summer of 2007, and 314,000 bpd per day in the summer of 2006, which will further affect the production of gasoline at U.S. refineries. The increase of ethanol in the marketplace will reduce average automobile fuel efficiencies.