Can the President Control Gasoline Prices?

of gasoline is a perfect example. In fact, one Pew research study showed that Democrats believe the president can control gas prices when a Republican president is in the White House, but not when a Democrat is. Republicans also believed that the president controlled gas prices when a Democrat occupied the

White House, but not when a Republican did. The truth is that no president, be they Democrat or Republican, friend of big oil, or supporter of alternative fuels, can do much of anything to affect these short term at price of oil and therefore of gasoline. The overriding factor that determines the price of oil from day to day is the market principle of supply and demand. It comes down to simple economics. When demand is greater than supply, prices rise.

The actual price of a barrel of oil is constantly changing. Since oil is a commodity that's traded on the futures market, buying and selling oil futures is called speculating because you're making trades based on expectations of future supply and demand, and for a while demand with skyrocketing. After the Great Recession ended, demand steadily increased as the global economy recovered.

To match that demand, US oil production rose dramatically, from around five thousand barrels a day in two thousand nine to a record high of thirteen thousand, one hundred barrels a day in early due in large part to the

drilling technology called hydraulic fracturing or fracking. American oil producers were able to keep pace with demand and keep gasoline prices stable, but on March six, crude oil went as high as a hundred and thirty dollars and fifty cents of barrel overnight, the highest price since two thousand and eight, just before the Great Recession caused a huge drop in demand. Prices then settled at around a hundred and twenty dollars

of barrel, which is still high historically. Reports indicated that the spike was due to supply disruptions resulting from Russia's invasion of Ukraine combined with the market forecasting the possibility of a US ban on Russian oil, which did come to pass. So if gasoline prices are largely at the mercy of global fluctuations in supply and demand, what can a president actually do, if anything, to influence gas prices. What about increasing the oil supply? But can't the president

boost US production? It's true that aggressive increases in US oil production would bring the global supply for oil closer to the demand. However, the US is such a small player on the international oil scene America controls only four percent of the world's oil reserves that even if the US doubled its current production capacity, it still wouldn't make

much of a dent. It would also take a number of years to assemble the drilling rigs, pipelines, and crew to make that kind of production increase, meaning oil prices would be unaffected in the short term. The only way the president can quickly boost the oil supply to lower gasoline prices is by tapping the Strategic Petroleum Reserve, an emergency stockpile of more than seven hundred million barrels of crude oil stored along the US Gulf Coast, it's happened before.

In June, President Barack Obama released thirty million barrels of oil from the emergency reserves in response to the crises in Libya and Yemen. The President George Bush also tapped the reserves, and the aftermath of Hurricane Katrina, temporarily lowering gas prices tend to fifteent and President Joe Biden has announced plans that will raise the total of reserve oil released this year to a hundred and eighty million barrels.

Over four hundred million barrels are still in reserve. One other way the president can influence gas prices is by changing the gasoline tax, which is currently at eighteen point four san sa galen, but this has been unchanged since and is not likely to move as there are a lot of political implications involved with raising or lowering it. Abiding called for Congress to enact day federal gasolene tax holiday over the summer of two to ease prices, but

nothing came of it. As we've discussed in previous episodes, states can change their own gas taxes a little more easily, and some have done so during this election season, possibly to curry favor with voters. Today's episode is based on the article can the President Control gas Prices? On how stuff works dot Com, written by Dave Rouse. Brainstuff is production of I Heart Radio in partnership with how stuff works dot Com, and it's produced by Tyler Klang. Four

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