(Adds analyst comment)
HOUSTON, March 28 California gasoline
consumption in the fourth quarter of 2007 fell 1.4 percent
year-on-year, in spite of a 1.2 percent increase in December
gasoline use, the California state sales tax board said on
For all of 2007, drivers in California used nearly 1
percent less gasoline compared to the previous year, according
to the California State Board of Equalization. On Wednesday.
the Federal Highway Administration said Americans cut back on
driving in 2007, the first such annual decrease in 20 years.
The Board of Equalization said the fourth quarter's
57-million-gallon drop was the seventh quarter in a row
gasoline use has fallen in the largest U.S. motor fuels
December's increase in gasoline consumption ended a
six-month slide, which analysts had attributed to retail
gasoline prices regularly running well above $3.00 a gallon.
The drop in demand was bad news to West Coast refiners,
said an energy analyst.
"If you're a refiner right now, you can't be all that
happy," said David Hackett, president of Stillwater Associates.
"Crude prices are high, gasoline demand is off, crack spreads
are crummy. Yeah, interesting times."
Refiners with West Coast operations like Valero Energy Corp
(VLO.N) and Tesoro Corp (TSO.N) have said they were cutting
back production because of poor refining margins.
The high retail gasoline prices are leading some consumer
behavior that confounds long-held assumptions about gasoline
demand in California.
"Gasoline demand is inelastic, except when it's not really
inelastic," he said.
(Reporting by Erwin Seba)