Economics: Consumption trend for gasoline

Consumption trend for gasoline
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There has been a downward trend towards gasoline consumption in America especially in the automotive industry. In essence, the oil consumption of America has fallen over the years, but this trend is characterized by gasoline which accounts for approximately two- thirds of oil consumption (Clayton, 2012). In addition, Americans now prefer fuel economy in cars resulting in less oil importation by 31 % in 2012 from the year 2005 and more domestic production. However, consumption of less gasoline does not translate to more savings as the prices of oil have risen over time (Clayton, 2012). Consumers mostly derive utility from gasoline through the use of vehicles. The changes in prices of gasoline also affect the demand of other goods, which shows that consumers mainly derive satisfaction from use of gasoline.
The change in the demand of gasoline has fallen in the last decade as more people prefer fuel energy efficient cars. However, the rise in prices over this period has had a profound impact on gasoline consumption than other factors. Americans pay higher prices for gasoline than ever before, even with reduced consumption as the prices are mainly set by OPEC countries (Organization of Petroleum Exporting Countries). In addition, the economic rise of China and India, both with huge populations has resulted in more demand for oil. The demand for oil is also related to the economic situation in the country regardless of the oil supply. In particular, the global down turn led to a fall in oil consumption as there was less disposable in come to spend (Clayton, 2012).
The disruption of oil supplies leads to a rise in the prices of oil even when the demand remains constant. This trend has occurred in ...