Topline
Gas prices fell two cents Wednesday to $4.779 per gallon, according to AAA data, down 24 cents from its highest-ever recorded level of $5.016 last month, and are on track to continue falling—though maybe not fast enough for President Joe Biden, who has criticized gas stations for keeping prices high, as the crisis continues to drag on his popularity.
A gas station in Washington pictured Sunday.
Key Facts
Gas prices will likely trickle further down after oil prices fell about 8% on Tuesday on the back of increased recession fears, with benchmark West Texas Intermediate crude trading at under $100 per barrel for the first time since early May (WTI fell further Wednesday, dropping .9% to $98.46 per barrel).
The price of crude oil is closely linked to the price Americans pay at the pump.
Patrick De Haan, GasBuddy’s head of analysis, said Tuesday he sees a “potential decline of 40-65 cents per gallon in the weeks ahead” should oil prices remain lower.
Even if that drop happens, gas prices would still be far higher than they ever were before 2022, and the prior record was $4.103 per gallon in 2008.
Others are not as bullish as De Haan in predicting major price declines with lower oil prices: Vectis Energy Partners principal Tamar Essner told Yahoo Finance Tuesday that without “demand destruction” gas prices won’t fall below $4 per gallon, while David Rundell, partner at the Arabia Analytica consulting firm, said Tuesday he doesn’t think prices will be “going down anytime soon dramatically.”
Key Background
Much of the increase in gas prices can be traced to Russia’s invasion of Ukraine threatening the global energy supply, though Biden has faced sharp criticism for his perceived inaction on gas prices, which have been a major driver of the U.S.’ highest inflation since 1981. Biden called last month for a federal gas tax holiday, which would temporarily suspend the 18-cent per gallon federal gas tax. Many characterized the move as an unrealistic way to bring down prices, and Biden’s suggestion has failed to rally support in Congress. Biden’s handling of the economy has been widely unpopular among Americans. A poll from Harvard University’s Center for American Political Studies and Harris Insight and Analytics last week found just 32% of registered voters approve of Biden’s handling of the economy and 28% of his handling of inflation, both lows since he took office.
Big Number
99.7% That’s how much the national average price per gallon has increased since Biden took office, according to AAA.
Tangent
In a viral Saturday tweet, Biden attacked companies running gas stations, writing: “Bring down the price you are charging at the pump to reflect the cost you’re paying for the product. And do it now.” Many criticized Biden for mischaracterizing the situation—gas stations largely set prices based on market conditions—including billionaire Amazon founder Jeff Bezos. Bezos responded to Biden’s tweet, writing, “Ouch. Inflation is far too important a problem for the White House to keep making statements like this. It’s either straight ahead misdirection or a deep misunderstanding of basic market dynamics.” Bezos, whose $139.2 billion fortune makes him the third-wealthiest man in the world according to Forbes’ calculations, has frequently sparred with the Biden Administration over its economic policies.
Further Reading
Gas Prices Drop Ahead Of July 4th–Here’s How Much Higher They Are Than Prior Years (Forbes)
Source: https://www.forbes.com/sites/dereksaul/2022/07/06/gas-prices-continue-to-drop-heres-how-far-they-may-fall-as-oil-prices-crater/