American consumers’ feelings about the affordability of gasoline were unchanged as spring passed into summer this year. As seen in the chart below, the gasoline affordability index held steady from April to July. At the recent level of 104 (±7), this index indicates that gasoline prices would have to double before U.S. consumers would think that they were unaffordable on average. As noted in our analysis of the spring survey, there has been a nominal improvement in the perceived affordability of gasoline since the index dipped to 93 (±5) this past winter. But statistically speaking, the difference is hardly significant. For the past five quarters, the average gasoline affordability index has straddled the 100 level. That means that the price at the pump would have to jump by 100% (i.e., double) before the average consumer would find it unaffordable in the sense of being so high that they feel they’d have to change the way they get around.
As of the recent summer sample, taken in July, Americans remain much happier about the price of gasoline than they were when we launched the survey in fall 2013. The gasoline affordability index was well below 100 for the first five quarters of the Energy Survey, when it averaged 62 (±5) and the national average price of gasoline was $3.53 per gallon. That price was $1.13 per gallon more than it has been over the past year, when it averaged $2.40 per gallon.
The above chart also shows that for 2015 and 2016, the gasoline affordability index saw a pronounced peak each January. Those peaks corresponded to seasonal low points in gasoline prices, which saw their annual minimum values in January for 2015 and February for 2016. That can be seen in the next chart, which plots U.S. Energy Information Administration (EIA) statistics for the national average retail price of gasoline. This winter, however, did not see a seasonal drop in gasoline prices, which were actually a bit higher than they had been over the prior six months. No surprise then, that the relative stability in gasoline prices that the country has enjoyed over the past year or so has also stabilized consumers’ views about the affordability of gasoline.