Fuels

California Bellwether?

Price increases likely contributor to continued declines in consumption

SACRAMENTO, Calif. -- Californians used 1.6% less gasoline22.1 million fewer gallonsin June than the same period last year. The decline of 0.6% during second-quarter 2007 marks the fifth consecutive three-month period to show less gasoline consumption, according to Betty T. Yee, chairperson of the California Board of Equalization. Californians still use a lot of gasoline, but this drop in consumption certainly points to a continuing downward trend, said Yee.

Over the past five years, Californians have used an average of about 15.8 billion gallons of [image-nocss] gasoline annually. During the 2006 calendar year, Californians consumed 15.83 billion gallons, down from 15.94 billion a year earlier.June figures show a 2.7% decrease from May 2007.

Second-quarter 2007's average pump price of $3.384 was 21 cents above prices during second-quarter 2006. Those higher prices generated approximately $982.5 million in sales tax during that quarter, an estimated $57 million more than second-quarter 2006.

The board estimated that nearly twice as much sales tax is generated annually by higher gasoline prices than five years ago. In 2006, sales tax revenues from gasoline sales were estimated to be $3.3 billion, while 2002's gasoline sales generated $1.7 billion. The state's excise tax revenues, 18 cents collected on every gallon, have remained relatively stable.

While we have seen an increase in gasoline sales tax revenues, it's likely the gain has been offset at least in part because people have less discretionary income to spend on other taxable items, Yee said.

The publicly elected board monitors gallons through tax receipts paid by fuel distributors. Click here to view all monthly, quarterly and annual figures.

Click the Download Now button below to view a gasoline consumption chart for the periods.

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