This spring saw a nominal improvement how U.S. consumers feel about the price of gasoline. The U-M Energy Survey’s gasoline affordability index was 105 (±7) based on our April 2017 sample, compared to a level of 93 (±5) in January. This difference is barely significant, statistically speaking. These values straddle an index level of 100, which would reflect a belief that pump prices would have to double before consumers felt that gasoline was unaffordable.
In any case, Americans are much happier about the price of motor fuel than whey were when we launched the survey in October 2013. As shown in the chart below, the index was well under 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 $1.14 per gallon more than it has been over the past year, when it averaged $2.39 per gallon.In 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. This winter, however, did not see a seasonal drop in gasoline prices, which were actually a bit higher in January 2017 than they had been over the prior six months. Although pump prices inched up a bit more by April this year, when they reached $2.53 per gallon, the average price that consumers told us they would find unaffordable rose to $5.18 per gallon. That’s significantly higher than the $4.76 per gallon threshold reported in the January 2017 survey sample. As a result, there was a nominal rise in the gasoline affordability index this spring.