The average American household will save just around $US42 per month over the next year if gas prices stay low.
RBC Capital Markets made this estimate by calculating the average miles driven per vehicle in the US, and how much gasoline all passenger cars (excluding larger trucks) use every year.
Then they judge that the average car goes about 22 miles/gallon, amounting to nearly 127 billion gallons of gas bought every year.
“Assuming $US0.46 is saved per gallon of gas (or $US0.28 cents if you wanted to simply look at YOY trends), this would amount to ~$US58 billion on an annualized basis,” RBC’s Scot Ciccarelli wrote in a note. “When we spread that savings across roughly 115 million households in the US, it should amount to just over $US40/month or $US500 per household on an annualized basis (assuming prices remain where they are for the next 12 months).“
They break down the maths in this table:
The benefit of an extra $US41.95, or any saving for that matter, should be considered relative to income. So people with lower incomes will feel the most benefit.
Retailers that cater to low-income customers will see the most of these savings, RBC said. Dollar stores could especially gain, since $US40 can bring home 40 extra grocery items.
Auto retailers will also benefit, as people will have more spare dollars to spend on undone car maintenance, RBC noted.
Gas prices have fallen with crude prices to around four-year lows around the country, and the national average was $US2.963 per gallon on Wednesday.