Marketplace Report: Motorists Scale Back The Federal Highway Administration says U.S. motorists scaled back the number of miles driven this past March by more than four percent since last year. That comes out to 11 billion fewer miles.

Marketplace Report: Motorists Scale Back

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From NPR News, this is Day to Day. Gas prices hit a new record high overnight. AAA says the new national average is $3.94 a gallon and there are some signs the high gas prices could be keeping drivers off the road. Marketplace's Amy Scott is here and Amy, people, they're really driving less?

AMY SCOTT: Well, it appears that they are, or at least were, according to new data from the Federal Highway Administration. U.S. drivers cut back substantially in March, that's the most recent month they have figures for. People drove 11 billion fewer miles that month, then in March of 2007. And that's about a 4.3 percent drop.

BRAND: And has this ever happened before?

SCOTT: Well, the last time driving on public roads declined in March was in 1979, during the energy crisis and the Highway Administration says it's also the largest yearly drop in any month, in the agency's history. Now, March was obviously a few months ago, so it will be very interesting to see if that trend continues. But there are other signs of demand falling. A new national survey shows people plan to stay closer to home this summer. Ridership on public transportation has gone up substantially this year. And we've seen a real shift in the kinds of cars people are buying, toward more fuel efficient vehicles. So, we are seeing some real changes in behavior, as people respond, not just to higher gas prices, but also to the overall economic slowdown.

BRAND: Well, Amy, at what point would the decline in demand, fewer people driving and the people who are driving more fuel efficient cars, at what point would that actually bring gas prices back down again?

SCOTT: Well, it's not clear, you know, crude oil prices did fall by more than three dollars a barrel yesterday, and analysts were partly crediting these signs to reduced demand. But I talked to Tom Wallen today. He's President of Energy Intelligence, publisher of Oil Industry News. And he says the oil market is a global one and global demand, thanks to growth in places like China and the Middle East, is still rising.

TOM WALLEN: Yes, it helps that demand goes down in the U.S. It slows the overall growth in demand globally, but we are still going to see this demand pressure on oil and that's going to be a continuing factor keeping prices on the high side.

SCOTT: And these prices are hitting the economy in many ways. Diesel prices also hit a new record today, just over $4.77 a gallon. That's hitting the trucking industry very hard. Nearly 1,000 trucking companies reportedly filed for bankruptcy in the first three months of this year. And today Dow Chemical announced it's planning to raise its prices by as much as 20 percent to offset energy cost and those costs will likely get passed onto consumers.

BRAND: Thanks Amy. That's Amy Scott of Public Radio's daily business show, Marketplace. ..COST $00.00

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