Miles driven in May drop 3.7 pct: government

WASHINGTON Mon Jul 28, 2008 3:32pm EDT

Traffic flows on the Golden Gate Bridge in San Francisco, January 2, 2008. REUTERS/Robert Galbraith

Traffic flows on the Golden Gate Bridge in San Francisco, January 2, 2008.

Credit: Reuters/Robert Galbraith

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WASHINGTON (Reuters) - Soaring gasoline prices and a weak economy combined in May to reduce the number of highway miles traveled during the month by a record 3.7 percent, the U.S. Transportation Department said on Monday.

The 9.6 billion miles less traveled was the biggest drop ever for any May, when traffic usually increases due to the Memorial Day holiday and the beginning of summer vacations.

During the first five months of the year, highway travel was down 29.8 billion miles, or 2.4 percent, from the same period in 2007.

"The decline in American driving is deepening," U.S. Transportation Secretary Mary Peters said.

"During the past seven months, Americans drove 40.5 billion miles less than they did over the same period last year. It's the equivalent of 200 round trips to the sun, if you want to put it into perspective," she said.

Three of the biggest monthly declines in highway travel, each more than 9 billion miles, have occurred since December.

The last time the United States had a big falloff in highway travel was in 1979, when pump prices spiked following the Iranian revolution. However, Peters said this time the driving decline was much longer and more severe.

The price of crude oil has fallen about $23 a barrel since reaching a peak of $147 this month, and the national price of gasoline is again below $4 a gallon.

Still, Peters said she did not think highway travel would bounce back if fuel costs fell significantly, because so many consumers have made permanent "behavior changes" by cutting back on their driving, switching to more fuel efficient vehicles and using public transportation.

"Fewer trips are being made to conventional filling stations and we expect that to continue for the foreseeable future," she said.

The Energy Department reported on Monday that U.S. gasoline demand in May was down 2.3 percent from a year earlier and was the lowest level for the month in four years.

The downside of less travel is less money going into the government's highway trust fund, which helps pay for road projects. Revenue for the fund is off $1.5 billion.

The fund receives money from an 18.4-cent federal tax on each gallon of gasoline sold and a 24.4-cent tax on diesel.

"By driving less, and using more fuel-efficient vehicles, Americans are showing us that the highways of tomorrow cannot be supported solely by the federal gas tax," Peters said.

She said more sustainable funding sources were needed, such as charging fees to travel by road during crowded times and private activity bonds to pay for projects.

(Editing by Walter Bagley)

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