Rising gas price projections complicate Biden’s horizons
Analysts expect U.S. gasoline prices to rise as high as $4 per gallon by this summer, putting a pinch on drivers and exacerbating problems for President Biden.
The White House has seen Biden’s approval ratings fall due to a mix of problems, including inflation and higher prices at the pump. In the last several weeks, administration officials have touted a slight drop in prices, claiming the fall is linked to various Biden policies.
But a new forecast from fuel price app GasBuddy released on Wednesday said fuel prices this June could climb to anywhere between $3.43 and $4.13 per gallon.
Prices at the higher end in particular would be an unwelcome development for Democrats in a midterm election year where they are already worried about losing their House and Senate majorities.
The same forecast predicts prices will then fall later in the year, which could provide some relief, with gasoline prices expected to drop to about $3.16 per gallon in October, according to GasBuddy.
The political question will be how it all plays out in November.
“This is a 70 cent range, which I think makes a big difference,” said Democratic pollster and strategist Brad Bannon, referring to the forecast’s range of prices for June. “If it’s on the high side, that’s a problem for Democrats. If it’s on the low side, not so much.”
But Bannon, who has contributed opinion articles to The Hill, called the expected decrease between June and November “good news for Democrats.”
“Americans have short memories,” he said. “Everything is relative. If gas prices are, say $4 in June and they’re down to $3.50 or lower in the fall, I think that helps Democrats a lot because it’s all relative.”
Ahmad Ali, press secretary for progressive pollster Data for Progress, raised concerns that even if the prices fall later on, Democrats will have to contend with people being “riled and energized because of them increasing in the first place.”
But, he said, the party should combat this by focusing on economic issues themselves.
“So long as the message becomes clear that the presidency and the Democrats are all about making the burden at peoples’ pocketbooks easier, I’m sure that they can keep their support,” he said.
Republicans are expected to go on the attack against Biden and Democrats if prices rise, as they already have been doing.
Asked how the price news impacts its 2022 strategy, a National Republican Campaign Committee spokesperson argued that Democrats should get the blame.
“Democrats have absolutely no credibility left on the issue of rising prices after they spent months claiming inflation was transitory,” Mike Berg, a spokesman for the Republicans’ House campaign arm, wrote in an email.
The new analysis from GasBuddy projects that prices could be highest in May and June, where they’re expected to be about $3.79 and $3.78 per gallon on average respectively, but could go as high as $4.06 and $4.13.
They’re forecasted to be lower in the fall, with prices ranging from between $3.09 and $3.52 in September, $2.96 and $3.35 in October and $2.87 and $3.24 in November.
GasBuddy’s head of petroleum analysis, Patrick De Haan, noted that the “potential outcomes vary widely,” and said that a lot of uncertainty is caused by the pandemic.
He also said that where the prices ultimately fall will come down to how large of an “imbalance” there is between supply and demand for gasoline.
“To get that high, there would have to be a large imbalance between supply and demand and if we saw prices on the lower side of the range, the imbalance would be much smaller,” he said.
Other analysts, too, predict a rise in prices for the start of next year.
Tom Kloza, global head of energy analysis at the Oil Price Information Service, attributed the issue to a reduced capacity to refine gasoline — lowering supply.
“Notwithstanding another variant … we’re going to see excessively high prices in 2022,” he told The Hill on Tuesday. “It’s going to run up, I’d say, between Presidents’ Day and Cinco de Mayo.”
But the federal government sees things differently.
The Energy Information Administration, an Energy Department statistics agency, projects that gasoline prices next year will remain relatively low, averaging $2.95 per gallon in the second quarter of next year and $2.89 in the third quarter.
“We have consistently been forecasting that U.S. and global crude oil production will ramp up in 2022 and start growing at a faster rate than demand. We expect that will lead to lower crude oil prices in 2022, and as a result, lower U.S. gasoline prices,” agency spokesperson Chris Higginbotham told The Hill in an email.
He added that the omicron variant could lead to a decline in demand but also noted that the new variant caused uncertainty in the projection, which was made on Dec. 7.