Changes in prime supplier sales of motor gasoline since 2020 differ significantly by state

Based on our Prime Supplier Report, U.S. motor gasoline sales by prime suppliers averaged 8.3 million barrels per day (b/d) in 2021, which was 5% less than the 2015–19 average. The difference between the 2015–19 average and the 2021 average is narrower than it was in 2020, which was 13% lower than the 2015–19 average. The smaller difference in 2021 represents the return of driving behavior and other consuming activity similar to levels before the COVID-19 pandemic began disrupting mobility in the United States in early 2020. Although prime supplier sales of U.S. motor gasoline have mostly returned to the level from before the onset of the COVID-19 pandemic, individual state-level gasoline sales show significant differences. Changes in driving activity, population changes, and employment drive these state-level changes in gasoline sales. Additional variables, including more people working from home or increased shares of electric and hybrid vehicles, are also likely to be affecting gasoline sales.

In some states, such as California, prime supplier sales remain significantly lower than average, but others, such as Utah, have not only surpassed their 2015–19 averages but have set all-time highs in prime supplier sales of motor gasoline during 2021. Differences in vehicle miles traveled (VMT) and employment since the beginning of the pandemic likely explain most of the variation in motor gasoline prime supplier sales, although long-term structural trends such as population growth have also affected gasoline sales. In particular, if states have motor gasoline sales that are lower than their 2015–19 averages but have high VMT and employment compared with before the COVID-19 pandemic, these states’ gasoline sales may be affected by increased penetration of electric vehicles, more residents working from home, or other effects.

Using select states for comparison, the differences in prime supplier sales of motor gasoline compared with their respective 2015–19 averages vary considerably. Average 2021 gasoline sales in three large gasoline consuming states remained lower than their respective 2015–19 averages, by 16% in California, 8% in New York, and 6% in Texas (Figure 1). In other states, however, sales were higher than average. In Utah, during 2021, gasoline sales were 4% higher than their respective 2015–19 averages, and were 1% higher in North Carolina. In July 2021, Utah set an all-time high in prime supplier sales of motor gasoline.

Some state-level differences are due to longer-term structural trends such as population growth. From 2015 to 2021, population grew in Utah by 12%, in Texas by 7%, and in North Carolina by 5%, all higher than the national growth rate of 3%. New York’s and California’s populations each grew by 1% during the same years. In addition to these longer-term trends, employment growth since the beginning of the COVID-19 pandemic has differed by state and has contributed to changes in driving activity and gasoline consumption. Utah’s nonfarm employment has grown faster than any other state since February 2020, and as of February 2022, was 5.1% higher than in February 2020. Conversely, New York nonfarm employment was 5.1% lower than its February 2020 level as of February 2022, which could explain some of the relatively low gasoline sales in the state (Figure 2). In other states such as Texas, however, even though employment has surpassed pre-pandemic levels, gasoline sales remain less than before the pandemic. These divergent trends could suggest an increase in work-from-home arrangements between employers and employees because fewer commutes as a result of working from home would lower gasoline sales but not employment.

Another factor for explaining gasoline sales variability is increased sales of hybrid vehicles (HEV), plug-in hybrids (PHEV), and battery electric vehicles (BEV), which consume less or no gasoline compared with internal combustion engine vehicles (ICE). Although still low as a percentage of the total light-duty vehicle fleet, sales of these vehicles were 5.4% of total sales in 2020 and were 11% of total sales in the fourth quarter of 2021, up from 2.9% in 2015 and 2.4% in 2010. Considering that most vehicles scrapped annually are older, less-efficient model ICE vehicles, the net additions to the U.S. automobile fleet are increasingly vehicles that consume comparatively less or no gasoline. These U.S. aggregate numbers vary considerably by state. California, which exhibited large disparities between VMT and gasoline sales, also has a relatively higher penetration of HEV, PHEV, and BEV as part of the state’s light-duty vehicle fleet. At the end of 2020, 6.2% of the state’s fleet was a HEV, PHEV, or BEV, which is higher than the national average of 2.5%. Of the United States’ nearly 1 million BEV, nearly 40% are registered in California.

Attributing the share that HEV, PHEV, and BEV penetration contributes to changes in prime supplier sales of gasoline is challenging, and the evidence from state-level VMT remains mixed. Regardless, the effects of the increasing share of more efficient vehicles—including more efficient ICE vehicles—in the light-duty vehicle fleet is more easily seen when analyzing gasoline sales adjusted by population and VMT. These measures help isolate the effects of increased vehicle fuel economy from other factors such as population or total driving as measured by VMT.

The comparisons yield evidence that states like California, with increasingly higher shares of BEV, have lower gasoline sales per capita and less gasoline sales per 1,000 miles of VMT compared with historical averages (Table 1). For example, prime supplier sales of gasoline per 1,000 miles of VMT were 10% lower in 2021 than the 2015–19 average in California, even though total VMT per capita in the state was only 6% less than average. Texas exhibited a stronger disparity, where VMT per capita was 1% lower than average, but gasoline sales per 1,000 miles of VMT were 9% less than average. Put differently, the amount of total driving per person in 2021 had returned to almost historical averages in Texas, yet prime supplier sales of gasoline per person had remained relatively lower, which indicates increased vehicle efficiency. This trend differed in North Carolina, however, where VMT per capita was 3% less than average, yet gasoline sales per 1,000 miles of VMT increased 2%. These mixed results suggest using caution in determining the factors contributing to changes in motor gasoline prime supplier sales.

Our prime supplier sales data track demand for finished petroleum products further downstream in the product distribution system than primary sources, such as refineries and bulk terminals. We define a prime supplier as a firm that produces, imports, or transports any of the surveyed petroleum products across state boundaries and local marketing areas and sells the product to local distributors, local retailers, or end users. Data collected on our Form EIA-782C, Monthly Report of Prime Supplier Sales of Petroleum Products Sold for Local Consumption, and its respondents are different from our broadest measure of consumption, product supplied, which is designed to capture all of the petroleum product that is delivered by the primary supply chain. Although aggregated prime supplier sales and product supplied tend to be very close, differences in survey respondents, normal sampling error, and other factors contribute to discrepancies.

For questions about This Week in Petroleum, contact the Petroleum and Liquid Fuels Markets Team at 202-586-5840.