U.K. Driving Soars in a Bullish Signal for Post-Vaccine Gasoline
(Bloomberg) -- Drivers in the U.K. are getting back on the road. The Easter break is over, kids are back in school, shops are reopening and restrictions on socializing have been eased. The result -- city streets are the most congested they have been since the start of the pandemic last year.
More than 60% of people over 18 have had a first vaccine dose, while almost 20% have had both shots, according to government statistics. That has allowed shops, gyms and bars and restaurants with outside space to reopen, luring people out of their homes, just as the weather begins to improve and temperatures rise.
The result is a surge in driving, as people continue to shun public transport in favor of private cars to get around. Data from the U.K. Department of Transport show nationwide rail journeys still languishing at 30% of pre-pandemic levels. In London, passenger numbers on the Underground system, which carried more than four million people a day before the pandemic, are down by about two-thirds, while buses are carrying about 60% of their normal six million passengers, according to figures from Transport for London.
In contrast, traffic congestion on Monday on London’s streets was just a fraction off its highest level for that day-of-the-week since the start of the pandemic and was well above levels seen on comparable days in 2019, according to data from location technology specialists TomTom NV (see chart below). Tuesday got off to an even busier start.
The resurgence in driving will provide a boost for gasoline demand into the summer months. Demand is already picking up, with seven-day average forecourt sales over the Easter weekend reaching 86% of last summer’s peak. As more businesses reopen and people begin to drive for weekend and longer breaks, demand should rise even further. And with international air travel hampered by restrictions, the added costs of Covid-19 tests and lengthy delays at airports, gasoline demand could surge as people favor holiday destinations to which they can drive.
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