When the fuel boom weighs on the American economy

published on Sunday, June 12, 2022 at 06:45

The record prices at the pump in the United States inflate the bill for motorists but also have repercussions on many parts of the economy, straining the budget of truckers, pushing up plane tickets or reviving interest in electric cars .

They crossed a new threshold on Saturday, with the average price of a gallon of gasoline crossing $5 for the first time.

– Truck drivers practice austerity –

Lamar Buckwalter, head of a road transport SME, raised his prices slightly.

But he cannot entirely pass on the increase in fuel to his customers: he clearly sees in his deliveries that consumers themselves “are starting to give up small pleasures”, such as beautiful pieces of meat, he told AFP. .

The last time he filled up, he spent $5.79 for every gallon of diesel (3.78 liters), more than double from a year ago.

So the carrier pays more attention to the journeys it accepts, even if it means giving up those who pay the least. He also plans to reduce the perks for his three employees, such as the usual annual picnic.

– Immediate flight of plane tickets –

The airlines themselves are doing quite well.

“It is generally said in the aviation sector that companies manage to pass on (to customers) around two thirds of the increase in kerosene in three to six months, and 100% in six to twelve months”, notes Savanthi Syth, specialist in the sector. for Raymond James.

But after two years of slow travel due to the pandemic, Americans are ready to pay a heavy price.

American companies, which for the most part ceased to buy kerosene in advance several years ago to protect themselves in the event of a sharp rise, managed to pass on almost all of the price increase in a few weeks: prices plane tickets in May were 38% more expensive than a year ago.

Another effect of the pandemic: the lack of staff has led some companies like Delta to reduce the number of flights offered this summer, and thus to consume less fuel.

– Frustrated appetite for electric vehicles –

On the specialized sites of Cox Automotive, the number of visits to the pages devoted to electric vehicles has jumped 73% since January, 25% for hybrids.

Sales of used electric cars soared 52% in May on the used vehicle sales site Carvana.

But between the shortage of semiconductors and supply chain problems, manufacturers are struggling to meet demand.

At Tesla, by far the number one electric car in the United States, you have to wait at least three months for a Model 3, six months for a Model Y.

Toyota and Lexus sold 46,000 hybrid vehicles in the United States in May, down from the 58,000 sold in May 2021 due to a lack of inventory.

– Holidays sometimes modified –

Chayzz Devyant, 32, had planned to go have fun in Atlantic City, a New Jersey resort town known for its casinos. But the trip would have cost him $162 for gas and $114 for a hotel. He preferred to cancel.

“The big tankers are to blame, they abuse prices,” he says.

From there to what the Americans give up traveling? Not sure, says Aaron Szyf, economist for the American Travel Association.

“We have contradictory signals,” he told AFP. “Oil prices obviously have an effect on type, distance, travel spending, but demand is so high after two years of pushback that hotels, attractions, national parks, flights are all expected to be at full capacity. capacity this summer,” he adds.

– A big shortfall for taxis –

“I used to spend $25 on gasoline a day, now it’s $45,” laments Rultz Alliance, a 69-year-old New York taxi driver.

Result: Instead of earning $800-850 net per week before the pandemic, he now only brings in $600-650.

But “we have no choice,” he told AFP while waiting for customers at La Guardia airport. “Inflation affects everything. Rents, food, you have to deal with it.”

Even with a hybrid car, the situation remains complicated: a driver who did not wish to give his name explains that he pays 30 dollars for gasoline a day, compared to 12 before the pandemic.

“It’s not worth driving anymore,” he says, pointing to the parking lot where the taxis congregate, almost empty. But at 60, he has yet to find an alternative.

With New York yellow cab fares not raised since 2012, a union in March called for a temporary fuel surcharge of 75 cents per trip. He hasn’t been successful so far.

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