Demand Drivers for Gas Stations

Buc-ee's 5901 North Fwy Fort Worth, TX 76177

Executive Summary: U.S. gasoline sales have plateaued. Consumption peaked in 2019 (~9.3 million barrels/day) and by 2024 was down to about 8.8 mbd. The COVID-19 crash in 2020 caused a sharp drop, and although demand recovered seasonally by 2022, it never exceeded the pre-pandemic high. In the short term , sales follow vehicle travel and the economy: holiday travel bumps up demand (e.g. Memorial Day 2023 road trips were ~6% higher than a year prior), while recessions or weather disruptions reduce it. High pump prices have only modest short-run impact (price elasticity ~–0.1), so sustained price spikes only slightly dent consumption. Over the long term , structural factors drive demand flat or down: rising fuel economy (U.S. fleet mpg has doubled since 1975) and growing EV/hybrid market share (EVs ~8% of new U.S. cars in 2024, plus hybrids) mean each mile costs less (or no) gasoline. Regulatory and behavioral changes add headwinds: many states plan to ban new ICE cars by 2035, and trends like telecommuting and ride-sharing have reduced average commute miles. Data insight: U.S. gasoline supplied averaged only ~8.945 mbd in 2023 (up just 1.5% from 2022) despite population growth, reflecting how efficiency and electrification offset driving growth. Overall, conventional fuel demand is cyclical in the short run but structurally stagnant or declining in the long run.

Vehicle Miles Traveled (VMT): Gasoline sales closely track how much Americans drive. In 2023, total U.S. VMT hit a record 3,264 billion miles (about 2.1% above 2022), helping gasoline supply rise 1.5% that year. Travel patterns create regular spikes and dips: summer vacations and holiday weekends typically produce surges in pump sales, whereas winter or school-season lows cut them. For instance, highway travel around Memorial Day 2023 was significantly higher than 2022, which pushed up gasoline demand. Conversely, sudden reductions in driving (like the COVID-19 lockdowns) caused precipitous demand falls. In short, higher VMT→higher fuel sales, making traffic volume a key short-term driver.

Economic Activity: Gasoline demand is cyclical. Employment and GDP growth boost commuting and freight movement, lifting fuel sales. During recessions or slowdowns (e.g. 2008 to 09), reduced commuting and industrial use caused gasoline consumption to decline. Thus, U.S. gasoline volumes tend to grow in expansions and shrink in contractions, reflecting overall economic health.

Gasoline Prices: Retail pump prices influence demand weakly in the short run. Energy modeling uses a “cost-per-mile” approach, reflecting that drivers adjust gradually. Empirical evidence shows a ~10% increase in real gasoline price cuts U.S. demand by only ~1 to 2% in the same year. In practice, even a sustained $1 to $2/gallon rise usually yields only modest demand reductions, because many trips (especially commutes) are inelastic to price in the near term. Only extreme price spikes (e.g. sustained over several years) provoke stronger conservation.

Seasonality & Weather: Seasonal cycles cause predictable swings. Summer driving season (June–August) always records the highest weekly pump sales, while winter lows follow. Weather exacerbates these effects: a major snowstorm or hurricane can sharply curtail travel (cutting gasoline sales), whereas unusually mild weather may boost driving. These seasonal patterns are among the largest short-run fluctuations in gas station traffic.

Inventory & Supply Shocks: Supply-side factors can indirectly affect station sales. For example, U.S. refinery maintenance seasons (spring) temporarily reduce gasoline production, tightening markets. If inventories fall just as demand rises (as in late spring 2023), pump prices rise which can slightly temper demand. Likewise, unplanned outages (hurricanes, pipeline issues) can create localized supply tightness. These effects are generally short-lived, but they show how supply conditions can modulate short-run demand.

In summary, short-term demand for gasoline is driven by how much and when Americans drive and what the economy is doing. Record-high VMT in recent years has kept demand near record, but weekly and monthly sales still swing noticeably with holidays, weather, and business cycles.

Fuel Economy Improvements: A major long-term headwind to gasoline use is increasing vehicle efficiency. U.S. light-vehicle fleet fuel economy has improved dramatically (see chart below). According to EPA data, combined passenger car+light truck fuel economy has risen from ~13 mpg in 1975 to nearly 27 mpg by 2023 (an ~2× increase). In practice, this means Americans can drive far more miles on the same fuel. Corporate Average Fuel Economy (CAFE) standards and technology (turbocharged engines, variable valve timing, cylinder deactivation, lightweight materials, etc.) have steadily boosted efficiency. These gains essentially “shrink” fuel demand for any given VMT level, flattening the long-term demand curve.

Electrified Vehicle Fleet: The growth of EVs and hybrids is directly displacing gasoline. U.S. EV sales have grown from near-zero a decade ago to ~1.2 million units in 2023. In 2024 EVs (BEVs+PHEVs) were about 8% of new car sales in the U.S.. Additionally, millions of conventional hybrids (e.g. Toyota Prius, hybrid SUVs) now sell each year (e.g. ~193,000 hybrids in March 2025). Including plug-in hybrids, nearly 25% of new light-duty vehicles are now some form of electrified vehicle. Each EV or PHEV replaces what would have been a gasoline gallon or more per daily driving, and hybrids improve mpg substantially. Over time, as automakers meet emission standards and consumers adopt low-emission models, the internal-combustion fleet’s share will shrink, capping gasoline demand.

Vehicle Usage & Demographics: Broader travel trends are also moderating demand. Younger Americans are getting licensed and buying cars later than prior generations, and many are city-centered with access to transit or bikes. Since 2020, work-from-home arrangements have become entrenched for a share of workers, permanently reducing commute VMT. An aging population also drives somewhat less annually. In aggregate, these shifts mean that per-capita VMT has likely peaked or is growing very slowly, so total miles (and thus fuel) don’t rise simply with population. In effect, long-term demographic and lifestyle changes tend to flatten or reduce total driving demand.

Infrastructure & Policy: Government actions favor alternatives to gasoline. Federal incentives (EV tax credits, funding for charging stations) and state policies (ZEV mandates, renewable fuel standards) tip the scales toward non-gasoline energy sources. For example, clean fuel programs require a growing share of ethanol or renewable diesel at the pump, which displaces pure gasoline volume. Investment in public transit or urban planning can also shrink auto dependence over decades. These policies, combined with stricter fuel and CO₂ standards, steadily reduce the gasoline share of overall transportation energy.

Putting it together, these long-run drivers suggest flat-to-declining gasoline demand even if total VMT grows. Indeed, analysts note that U.S. gasoline use in 2023 (~8.9 mbd) was roughly equal to levels 20 years ago despite far more vehicles on the road. On a per-person basis, Americans burn about 20% less gasoline today than in the early 2000s. Unless an unforeseen surge in travel occurs, conventional fuel sales at gas stations have limited growth potential and are likely to stagnate or shrink.

Even beyond these trends, several additional headwinds threaten station fuel sales:

Regulatory & Policy Pressures: Environmental and climate policies increasingly target gasoline. Many states have adopted Zero-Emission Vehicle mandates (California’s 2035 ban on new ICE cars is the prime example). Even where such policies face pushback (a recent Senate move aimed to block CA’s rule), they indicate the trajectory toward electrification. Meanwhile, tighter CAFE/emission standards force fleets to shift to hybrids/EVs. Fuel taxes or carbon pricing (if enacted) would raise the effective cost of gasoline, further dampening demand. Collectively, regulatory changes impose structural limits on future ICE vehicle sales and hence on gasoline volumes.

Alternative Mobility: New transportation modes divert some traditional driving. Ride-hailing and car-sharing services reduce personal-car miles (one Uber trip replaces a private car trip). Micromobility (e-bikes, scooters) substitutes for short urban drives. Autonomous vehicle technology, once mature, could further shift travel patterns (potentially enabling more shared, efficient fleet usage). Expanded public transit in growing cities also eats into gas-driving trips. As these alternatives expand, they form a gradual headwind on gasoline demand, especially in dense markets.

Consumer Behavior Shifts: Behavioral changes have non-trivial impact. Survey and travel data suggest some Americans are content to drive less – aided by remote work flexibility and online commerce. For example, commute VMT has stayed below pre-2020 levels in many metro areas. Moreover, high fuel efficiency and environmental awareness make drivers more responsive to prices: with 40+ MPG vehicles, a $1 price swing per gallon per 100 miles means only a 2.5-cent difference in fuel cost, so drivers often choose larger cars or longer trips over curbing usage. In sum, post-2020 norms and preferences (digital meetings, streaming entertainment at home, etc.) have permanently erased some driving that used to be taken for granted.

Economic & Price Shocks: In the long run, sustained economic factors can also cut demand. If policymakers impose hefty gasoline taxes (e.g. for infrastructure funding or carbon reduction), American drivers would steadily reduce miles or upgrade to higher-efficiency vehicles. Prolonged high oil prices (from global supply constraints) could temporarily suppress travel. And broad economic malaise (another recession) would naturally depress commuting and shipping. While these factors are harder to quantify, they reinforce the narrative that gasoline is no longer on a growth trajectory.

In summary, traditional gas station fuel sales in the U.S. exhibit clear short-run cycles but face secular headwinds. In the near term, demand will rebound or dip with travel (vacations, holidays), weather, and economic conditions. However, every year’s new vehicles are more fuel-efficient or electrified, meaning the baseline for gasoline is shrinking. Policies and consumer choices amplify this effect. Absent a countervailing boom in vehicle use, analysts generally expect U.S. gasoline volumes to remain flat or decline over the next decade. In short, while gas stations will remain vital in the immediate term, the underlying growth drivers for conventional gasoline sales are weakening .

June 18, 2025, by a collective of authors at MMCG Invest, LLC, gas station feasibility study consultants

Sources:

U.S. Energy Information Administration (EIA). How much gasoline does the United States consume? (FAQ, updated Jan 12 2024).

U.S. Energy Information Administration (EIA). U.S. Product Supplied of Finished Motor Gasoline (monthly table, accessed Jun 2025).

Federal Reserve Bank of St. Louis / FHWA. Moving 12‑Month Total Vehicle Miles Traveled (M12MTVUSM227NFWA) (series updated Apr 2025).

U.S. Environmental Protection Agency (EPA). EPA report shows U.S. fuel economy hits record high and CO₂ emissions reach record low (press release, Dec 20 2024).

AAA (American Automobile Association). 42.3 Million Americans Expected to Travel for Memorial Day Weekend (news release, May 15 2023).

International Energy Agency (IEA). Global EV Outlook 2024 – Trends in Electric Cars (report section, Apr 2024).

Reuters. Consumers boosted 2024 U.S. new‑car sales to five‑year high; EVs near 8 % market share (Jan 3 2025).

California Air Resources Board (CARB). Advanced Clean Cars II: By 2035 all new cars sold in California will be zero‑emission (program page, effective Nov 30 2022).

Reuters. U.S. Senate votes to block California 2035 electric‑vehicle rules (May 22 2025).

National Bureau of Economic Research (NBER) – Hughes, Knittel & Sperling et al. Short‑Run Gasoline Demand Elasticity: Evidence of a Shift (Working Paper 12530, 2006; meta‑analysis referenced for −0.1 ≈ −0.2 elasticity range).

Pew Research Center. How COVID‑19 Changed U.S. Workplaces (analysis, Feb 12 2025 – remote‑work prevalence and commuting implications).

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