Nexus: Fuel Prices and Business Activity
A Beagle Research reader poll on the recent run up in energy prices revealed that a plurality of readers have not yet felt the pain to the extent that it is making them reduce the
ir driving. While no majority opinion was expressed, the largest group (44%) said the high price of fuel has not affected their approach to business. Only 11% said they were traveling less overall but nearly 28% said they were driving less. The “other” category made up 16% of those responding.
Experts have said that four dollars per gallon provides a tipping point at which consumers begin to feel the pain enough to alter their driving patters, which includes driving for business. Also, the price of gasoline closely mirrors the cost of jet fuel, which is reflected in ticket prices and higher prices can cause a downturn in air travel.
According to the U.S. Department of Transportation (US DOT) the last time gasoline prices reached and then eclipsed the four dollar level (summer 2008), Americans drove a combined 122 billion miles less than in the prior year. As fuel prices again approach four dollars per gallon the run up will test how well companies have internalized the lessons of 2008 and developed alternatives to travel to maintain business activity levels.