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You might think that when gas prices get high, stations sell fewer gallons. Upside data shows that’s not exactly true.
Demand for fuel is relatively inelastic in the short term — that’s because it’s a necessity for most people. Even when gas prices are high, Americans still have to commute to work, and take their kids to school, and generally live their daily lives.
But there’s a big difference between demand and behavior.
And with gas prices rising by more than 35% since late February, we are seeing behavior start to change. While higher prices don’t change how much gas people buy, they do change how they buy it.
See how habits have shifted and learn more about the critical $4 per gallon threshold for behavior change.
$4 per gallon: The behavioral tipping point
While demand may not drop, crossing the $4 threshold triggers a noticeable shift in consumer mindset.
At this level, fuel costs become more salient. Consumers start paying closer attention and taking action to offset the sting at the pump. In other words, consumers become more intentional and value-driven in how they purchase fuel.
The last time gas prices exceeded $4 per gallon was in 2022, following the onset of the war in Ukraine. During that period, transactions on savings platforms increased 13% above normal levels when prices were above $4. Additionally, when prices fell below $4, activity dropped to 6% below average.
This is a clear behavioral response tied to a specific price threshold. Crossing $4 per gallon activated deal-seeking behavior in 2022, and so far, it looks like that’s happening again in the present.
As prices have climbed, there has been a noticeable increase in new app downloads and engagement with savings platforms, indicating that consumers are actively seeking ways to reduce their fuel costs.
This aligns with historical patterns, and it suggests that deal-seeking behavior will continue to intensify if prices remain elevated.
What this means for retailers
For fuel and convenience retailers, this shift presents both a challenge and an opportunity.
1. Competition increases at the margin
Even if overall demand remains stable, where consumers choose to fill up becomes more competitive. Small differences in price or perceived value can drive decision-making.
2. Value becomes more visible
Consumers are actively looking for savings, making promotions, loyalty programs, and cash-back offers more impactful than usual.
3. Behavior becomes more dynamic
Customers are more likely to switch between stations, seek out offers, and change their purchasing patterns. This creates a more fragmented and less predictable demand environment.
The bottom line
The most important takeaway isn’t that consumers are buying less fuel amid high prices. They’re buying roughly the same amount as before. Rather, they’re becoming more deliberate, price-sensitive, and engaged in how they buy it.
For retailers, success in this environment is about winning the decision at the moment of purchase. Those who respond to that shift — by showing up with value when it matters most — stand to gain.
Follow along with more updates around the war in Iran's impact on the fuel market and broader economy at our Strait of Hormuz Impact & Response Hub.
