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U.S. Household Expenditures for Gasoline Account for Nearly 4% of Pretax Income

Graph of average spending on gasoline, as explained in the article text

Source: U.S. Energy Information Administration estimates.

Republished: February 4, 2013, 10:00 a.m.: To correct an error in the text.

Gasoline expenditures in 2012 for the average U.S. household reached $2,912, or just under 4% of income before taxes, according to EIA estimates. This was the highest estimated percentage of household income spent on gasoline in nearly three decades, with the exception of 2008, when the average household spent a similar amount. Although overall gasoline consumption has decreased in recent years, a rise in average gasoline prices has led to higher overall household gasoline expenditures. However, these expenditures as a percentage of overall household income are still low when compared to the early 1980s, when the estimated portion of household income spent on gasoline surpassed 5%. Although travel per household has increased significantly since the early 1980s, vehicle efficiency has also risen significantly, reducing the amount of gasoline used per mile.

Efficiency gains have accelerated in recent years, such that total U.S. gasoline consumption fell in 2011 to 134.2 billion gallons, its lowest level since 2001. However, at the same time, EIA's average city retail gasoline price rose 26.1% in 2011, and another 3.3% in 2012, when it reached $3.70 per gallon. The effect of the higher prices in 2011 and 2012 outweighed the effect of reduced consumption. As a result, expenditures increased to a record annual average of $2,655 per household in 2011, rising to an estimated $2,912 in 2012. The 26.1% yearly increase in 2011 was six times greater than the 3.4% rise in nominal household income. Additionally, the 3.3% estimated gasoline price rise in 2012 outpaced the 2.9% estimated increase in income.

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