Today, the pain at the pump in San Diego was eased ever so slightly by a decrease of 5¢ per gallon on average for regular unleaded gasoline.

According to UCAN's Cheap Gas Locator survey, the average price of gasoline in the county is now $3.41 a gallon, down from $3.459 last Wednesday. Gas prices reached an all-time inflation adjusted high of $3.50 on Tuesday May 8th and have been declining slowly since then.

Meanwhile, gas prices are increasing nationally. According to the Department of Energy Energy Information Agency's Gasoline and Diesel Fuel Update, national gas prices have reached an all-time record high of $3.21 a gallon, up 35¢ from last year. These price declines are happening against a tidal wave of mainstream media stories that gas prices are increasing nationally and in California due to increased demand by consumers who do not care about the price of gasoline.

Don't you believe it.

Are Americans really using more gas? Probably not. 

According to the mainstream media, high gas prices have had virtually no effect on consumer buying. A steady drumbeat of  stories from the Associated Press, USA TODAY, and a host of network TV news shows have asserted that Americans are guzzling more gas than ever and that the high prices have not affected consumer buying habits.  But recently, many analysts have begun to rethink this assumption.

Three months ago, UCAN asserted that gasoline demand was down in California, and documents from the California Board of Equalization concur. On April 13,  the Board of Equalization reported, that gasoline consumption for the last three quarters of 2006 was 112 million gallons less than the comparable period in 2005. This was the first decline in the state's gas consumption in 14 years. The average statewide gas price during the nine months was $2.958. The board said Californians may be avoiding long trips or switching to fuel-efficient vehicles such as hybrid cars. With gas prices averaging nearly 50¢ a gallon more this year, it is highly unlikely that consumption has increased.

On Monday, OPIS, the Oil Price Information Service, reported in its newsletter (Vol 27, No 21) that media and government claims of increased fuel consumption in the USA should not be believed. "Talk to western chain marketers and they will confirm that sales are flattening ..."

On May 18, Science Daily ran a UPI report claiming that the Federal Highway Administration's data showed that gasoline demand in the USA has dropped since 2006.

What's more, consumption figures from the federal Energy Information Agency (EIA), and the federal Department of Transportation (DOT) do not jibe. According to a May 22 report in the New York Herald  the EIA says consumption is up by 2%, while the DOT says Americans are driving 1% less. 

What's  happening?

 UCAN believes that even though there are more drivers on the road, consumers are probably buying significantly less gasoline. It will take awhile for the statisticians to catch up.  Reduced demand is finally forcing prices lower. But "lest there be a misunderstanding," San Diego and California are long overdue for lower prices.  If the market was truly competivie, our gasoline prices would be significantly lower than what they are right now.