The Hidden Advantage of High Gas Prices? Fewer Wrecks.
It’s no secret that in the U.S., gas prices are at an all-time high. Even accounting for inflation, they’ve hit levels almost unheard of in the past five decades, nearly 50% higher than last year. Experts predict they may continue to rise, possibly past the record gas prices of the 2008 recession.
This surge in fuel costs directly affects millions of Americans at the pump. Indirectly, greater transportation costs result in higher prices for all consumer goods.
This dramatic uptick in price has led to an unexpected turnaround: a downturn in the overall number of car accidents. Dive in to find out what is causing this rise in fuel prices, and how paying more for gas connects to fewer accidents.
Why Is the Cost of Gas Increasing?
The increased price of crude oil is the main contributor to the cost of gas spiking. The cost of this raw material made up 60% of the market price of a gallon of standard gasoline as of April, according to the Energy Information Administration. The high demand and low supply of crude oil has put a strain on American resources. Russia produces around 12% of the world’s crude oil. Russia’s war in Ukraine led to stiff sanctions by many western nations – including the U.S. – that include the sale of crude oil. The pandemic didn’t help either. The supply of oil has not risen with its high demand post-COVID.
Apart from the strain on crude oil supply, gasoline producers have also increased the cost of refining to meet the needs of inflation. The EIA reports that refining costs, distribution marketing, and taxes account for 46.4% of the cost of regular-grade gasoline.
Why Higher Gas Prices Reduce Traffic Fatalities
According to a study published on Science Direct examining the relationship between retail gasoline prices and fatal crashes between 2007 and 2016, spikes in gas prices were shown to have an inverse correlation to total auto accidents. The higher the spike, the fewer the crashes, and vice-versa.
Higher gas prices lead to fewer motorists on the roads, as a substantial number of individuals prefer to use alternate means of transport to save money. The high prices also influenced people’s driving habits, particularly high-risk drivers – such as teenagers and young adults – who began driving slower and with greater caution to reserve gas.
Another study observed that for every 10 percent rise in gasoline prices, there was a 1.5 percent drop in car accidents. This figure remained consistent across races, ages, and genders, even when other influencing factors like alcohol consumption and seat belt use were considered.
Our own research (see graph below) shows a strong correlation between average gas cost and number of auto crashes, with those lines only blurring in 2022. Higher gas prices result in fewer car accidents. With fewer drivers on the road, there is not as much opportunity for fender benders, fatal wrecks or pile-ups.
Why Lower Gas Prices Increase the Risk of Accidents
On the flip side, when prices are low, people become less concerned with saving money on gas, leading to more drivers on the road. Individuals also tend to travel greater distances, increasing the likelihood of motor accidents.
Note: While these studies indicate gas price fluctuations can have an effect on reducing traffic accidents, the impact differed among various demographics. Traffic crashes among young drivers reduced almost immediately, but there was an intermediate change in older adult motorists.
Our personal injury lawyers have seen firsthand how the real victims of car accidents and gas price fluctuations are hardworking Americans. That is why we are dedicated to helping our clients understand the limitations of their cases while seeking justice.
Consider the Impact of Gasoline Prices
Car accidents can happen anywhere and at any time, regardless of the number of vehicles on the road. For this reason, you should always be aware of your surroundings and practice defensive driving. If you’ve suffered a car crash as a result of another motorist’s negligence, call an attorney immediately.
No one anticipates the physical, mental, and financial repercussions of an accident, which is why we are here to help. Contact us at Wettermark Keith to discuss your case and gain an ally in the fight against big insurance companies.
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If you or a loved one have been injured and think you might have a case, call us now for a free consultation.