Cheaper petrol – people drive more

This time last year petrol was up around $2.20 a litre I think, and had been over $2 a litre since early June. That was pretty unbelievable compared to how prices had been in the past, I know that it certainly hurt the wallet to see a full tank cost nearly $100. At that time we saw some pretty extreme responss to petrol getting that expensive, with public transport usage going through the roof, and traffic volumes on state highways declining significantly. Below we have a graph showing traffic volumes for June 2008 compared to June 2007 – a significant decrease:

The numbers are a little tricky to read, so I shall help. For the Auckland and Northland region we had a 6.6% drop in volumes, while for the country as a whole the drop was 7.9%. Those are some pretty significant numbers, which I guess isn’t surprising.

One of the most interesting aspects of this part of last year, when prices were so high, is to wonder where all the traffic went. Some of it certainly switched to public transport – as ARTA’s June 2008 Monthly Business Report stated that “June month patronage is 11% higher for bus, 29.5% higher for rail and 0.5% lower for ferries” compared with June 2007. However, because the vast majority of people travelling around Auckland do so by car, even a 12% increase in public transport use overall is far less than a 6.6% decrease in car usage. So some trips seemed to just disappear – I guess people’s discretionary travel was reduced by the high cost of such travel. I certainly know that I thought twice about driving anywhere when petrol was above $2.20 a litre!

Bringing things forward by a year, NZTA have released their June 2009 traffic volume data. As outlined in the graph below, traffic voumes have somewhat rebounded from their lows last year.

It is interesting to compare the above graph with the difference between May 2008 and May 2009 traffic, which I commented on last month. Whereas May 2009 traffic was down on May 2008, we see with June that trend has been reversed. I suppose that in June this year petrol prices did come down a bit, from the $1.60s to the high $1.50s (back up to the low $1.60s now I think), but I really think that the main reason is that June 2008 figures were REALLY LOW, and it would have been hard for the 2009 figures to be even lower (even though we’re in a recession).

Just to avoid everyone getting really confused here, the following points/trends seem to be emerging from this data:

1. High petrol prices in 2008 (from June to September in particular) really got people out of their cars. Some went to public transport and others just didn’t make the trips.
2. Although petrol prices have returned to levels very similar to this time two years ago, traffic volumes are still below the levels of this time two years ago (a 2.5% rise for Auckland comparing 09 to 08 cannot offset a 6.6% fall comparing 08 to 07). Some of this may be due to the recession, some may be due to better provision of public transport.
3. It appears very likely that should petrol prices increase in the future, traffic volumes would decline once again.

So cheaper petrol prices (by around 50c a litre!) compared to this time last year has meant that more people are driving. This might make it difficult for public transport patronage over the next few months to match the levels reached last year – hopefully ARTA release their monthly business report soon so we can have a look!

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