Posts tagged “gasoline prices”
The Claim: President Obama Has Doubled Gasoline Prices
During the Republican primaries, a number of candidates made a claim that at first glance seems improbable: That under President Obama, gasoline prices have doubled. A current advertising campaign by the American Energy Alliance repeats that claim: “Since Obama became president, gas prices have nearly doubled. Tell Obama we can’t afford his failing energy policies.” Let’s examine that claim.
A Recent History of Gasoline Prices
We all remember $4/gallon gasoline under President Bush, so how could prices have doubled under President Obama? Let’s look at the recent history of retail gasoline prices. Barack Obama was sworn in as president on January 20, 2009. In the week that ended on January 19, 2009, the weekly retail gasoline price in the U.S. was $1.90/gallon. Most people don’t remember that given the recent history of high gasoline prices, but I will get to that. CONTINUE»
While U.S. gasoline prices have been on the rise for the past two months — and are presently $0.15/gallon higher than they were a year ago — I expect that gasoline prices will start to fall rapidly in the weeks ahead. There are four reasons for this.
- First is that the spike from Hurricane Isaac will be short-lived as damage to oil and gas infrastructure seems to be limited. Facilities will be back online relatively quickly.
- Second is that summer driving season is at an end, and demand for gasoline will now decline.
- Third, the transition to winter gasoline (explained in depth in Refining 101: Winter Gasoline and Why Summer Gasoline Means Higher Prices) begins on September 15th. This will both lower the cost and increase the supplies of gasoline.
- Finally, the recent run-up in oil prices appears to be already priced into the cost of gasoline.
Today’s column was supposed to be about what has happened with ethanol exports following the expiration of the ethanol tax credit. That is an interesting story (and exactly what I felt would happen once the credit expired), but it will have to wait until next week, because there is a story of much greater public interest. In fact, this current column was originally about President Obama and gasoline prices, but there is a peripheral issue of importance that I thought I would address first. I will get to the gas price discussion in a day or two.
I did two interviews on the subject of Obama and gas prices last week. One was with Brian Beutler at Talking Points Memo (TPM):
The second was with Alan Colmes from Fox News Radio. (A podcast of this is available at the link).
I will summarize the highlights from these interviews in the next column, elaborate on some points (like why I favor both expansion of renewable energy and the Keystone XL pipeline), and explain why President Obama is not to blame for current gasoline prices.