The unexpected plunge in gasoline prices has been a boon for many Americans, with a third of U.S. gas stations now selling regular unleaded for less than $2 a gallon. Among those who warn such prices are too good to last: President Barack Obama.
In an interview with David Shepardson of The Detroit News, Obama said "folks should enjoy" lower gas prices, but warned that they would inevitably rise again given demand for oil around the world.
“I would strongly advise American consumers to continue to think about how you save money at the pump because it is good for the environment, it’s good for family pocketbooks and if you go back to old habits and suddenly gas is back at $3.50, you are going to not be real happy."
Obama's comments came on the day he's taking a victory lap for his administration's bailout of Detroit's auto industry, visiting a Ford plant in Wayne, Mich., that was retooled to build models like the C-Max Hybrid and Focus Electric thanks in part to low-cost federal loans. That the plant is closed this week because sales of Ford's hybrids have fallen in the face of low gas prices shows just how much headwind such messages face.
The truth is that while Americans have changed their car-buying habits due to cheap fuel, it hasn't been by much. The average fuel efficiency of all new vehicles sold in December was 24.1 mpg, a reduction of 0.2 mpg from November and down 0.7 mpg from a high hit in August, according to the University of Michigan Transportation Research Institute. That's still 5 mpg better than when UMTRI began tracking such numbers in October 2007, and while Ford's small cars are struggling, others such as the Honda Fit have seen sales grow.
And Obama can take some credit for that as well: Under the fuel economy rules his administration set in 2009, every new model unveiled today and for the next several years will have to be more efficient than the one it replaces. It's not the only reason Ford decided to build aluminum-bodied pickups, or Chrysler chose to put a nine-speed automatic transmission in many of its vehicles — but automakers have shown in the past that without such tough rules, fuel economy becomes less of a priority. At the moment, automakers number among those enjoying low gas prices; sales of full-size vehicles and larger SUVs rose greatly in 2014, boosting profits back to near-record levels. Only if they have to keep idling plants like Wayne will the enjoyment wear thin.