Coronavirus fuels historic drop in gasoline demand
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The amount of gasoline American drivers are consuming dropped to levels not seen in more than 25 years, government data shows.
Driving the news: When most of us are staying home and not driving, this is one of the most predictable—but nonetheless still staggering—upshots of the unfolding coronavirus crisis.
The big picture: As the pandemic threatens lives around the world, it’s shutting down a global economy driven by oil consumption. This, along with a related price war between Saudi Arabia and Russia, is sending oil prices—and therefore gasoline prices—into a tailspin.
The intrigue: President Trump is meeting Friday afternoon with oil-company executives to discuss ways to help the imploding sector.
By the numbers:
- Gasoline consumption dropped nearly 30% in the week ending March 27, compared to the week prior.
- The current average price for a gallon of gasoline is $1.95, compared to $2.44 a month ago, according to AAA data.
- Expect both consumption and prices to keep dropping for weeks.
What we’re watching: How low prices could go—and how much they will rise in the future.
- AAA spokeswoman Jeanette Casselano says it could breach the low mark following the 2008 economic crash, which was $1.68 in January 2009.
- Patrick De Haan, head of petroleum analysis at GasBuddy, says the average could drop to below $1.50 a gallon. If it goes much lower than that, it hit the lowest level since 2004.
The bottom line: Consider it a cruel coronavirus irony that most people can’t—or at least shouldn’t—take full advantage of these rock-bottom prices. “But the good news is that even once this is over, I expect far more affordable prices this summer due to a hangover in oil supply,” De Haan emails.
