Why Are Gas Prices Rising Again 2018

The merits: Joe Biden is to arraign for college gas prices

The ascension cost of gasoline is being felt across the U.Due south., as the national average price has gone up from $2 per gallon last twelvemonth to $3 per gallon as of June 9, according to data from the American Car Association.

Many on social media merits President Joe Biden is to arraign for this change.

A June 1 Instagram post put the title "Joe Biden's America" atop a graphic showing the price jump from Jan to May 2021.

"Human I haven't seen gas prices this high since the last time (a) Democrat was in office!" claims one meme shared to Facebook on May 22.

"It's called the Biden effect," commented one Facebook user under a similar May 18 Facebook mail.

Blaming Biden for this uptick isn't a new miracle. These claims have been in circulation since January and particularly allege Biden's cancellation of the Keystone Forty pipeline significantly impacted gasoline, "ensur(ing) a huge increase in gas prices for millions of us."

United states of america TODAY has reached out to the posters for comment.

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While information technology'south true gasoline prices have risen significantly since Biden took office on Jan. 20 the upward trend predates Biden'due south time in office and is related to COVID-nineteen and market factors, non who occupies the White House.

Pandemic's effect on supply and need

Equally with whatever commodity, the toll of gasoline is determined by the unproblematic residuum of supply and demand: a high supply and depression need means low prices, while a low supply and loftier demand mean prices ascent.

The most of import driver of this fluctuation is rough oil, from which gasoline is derived. This fossil fuel typically accounts for between 50% and 60% of the price at the pump, said Jeanette McGee, a spokesperson for AAA.

In 2020, crude oil prices became extremely cheap, and so much then it was being traded at negative prices, McGee told The states TODAY. Brent rough oil, for instance, a blend supplying almost of Europe, was being sold at $nine a barrel, its lowest price in decades, the U.South. Energy Information Administration (Eia) reported.

The chief reason for this drop in rough oil prices was the pandemic, said McGee and Mark Finley, a swain at Rice University's Eye for Energy Studies.

"The pandemic drove the world'south oil market place to become massively oversupplied, inventory dramatically increased and prices collapsed," Finley told USA TODAY.

In response to the low demand due to reduced travel and lockdown restrictions, Finley said major oil-producing countries like Russia, Saudi Arabia and member countries of the System of the Petroleum Exporting Countries, or OPEC, decided to cut down on their own oil production.

But the cut meant oil producers weren't fix to meet the demand for crude oil once information technology renewed this twelvemonth thanks to easing of COVID-nineteen-related restrictions.

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"This twelvemonth, demand has then far increased more rapidly than production rates, which means the United States had to draw more on its gasoline storage inventories, which has contributed to prices going upwardly," EIA spokesperson Chris Higginbotham said in an email to U.s. TODAY. "We await oil producers in the Usa and globally to increase their product levels through 2022, which nosotros look to contribute to lower rough oil prices, and lower gasoline prices."

Gas price uptrend predates Biden

While presidential actions and policies can have some impact on the crude oil market, they don't have as much influence over gasoline prices as 1 might call up.

"Some of (a president's) decisions can touch or contribute to market changes, which tin can and then impact (future) rough oil, merely they don't dictate gas prices," said McGee. "If you go dorsum and look at historical data, whether it was Bush, Obama, Trump or Biden, (gas prices) go upwards and down no matter who'southward in office."

During former President Donald Trump's term, the national average for gasoline had gone up to about $3 a gallon in May 2018 and hovered close to that price until fall 2018, according to data maintained by AAA. The cost rose notwithstanding again to most $iii a gallon in May 2019 before dropping slightly below $2 per gallon when state and local governments mandated lockdowns in March 2020.

Gas prices slowly crept from $2.xx per gallon in September 2020 to $2.40 past the fourth dimension Biden took office in January 2021. McGee said elections typically bulldoze gasoline prices up.

This upward tendency was expected to keep due to pandemic recovery, reduced rough oil supply and the approach of summer – historically considered a peak travel season – simply arrived sooner due to the ransomware attack on the Colonial Pipeline, the East Coast's major fuel supplier.

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"Nosotros have expected gas prices to striking $3 a gallon around Memorial Twenty-four hour period, only with the (Colonial) pipeline offline, information technology actually jumped the national boilerplate to $3 and more than prior to Memorial Day," said McGee.

Keystone 40, other Biden policies don't affect today's gasoline costs

Many critics point to Biden'south decision on the Keystone XL pipeline as fueling the gas price spike, only experts say there's no such connection.

The extension of the Keystone pipeline, first proposed in 2008 by TC Energy based in Calgary, Canada, was rejected past former President Barack Obama in Nov 2015 but after approved by Trump in March 2017 . Biden then suspended the projection in Jan. And on June 9, TC Free energy appear information technology was terminating the project.

Even if construction wasn't halted, the Keystone Twoscore pipeline wasn't in operation and therefore wouldn't accept an affect on current gas prices, said Finley of Rice University.

"That was something that would touch on downward the road," he said.

David Dismukes, economist and executive director of Lousiana Country University's Center for Energy Studies, agreed, telling U.s. TODAY the pipeline would have had a "longer-run impact in providing a diverseness of supply for refineries in the Gulf Coast."

Similarly, other energy policies rolled out by President Biden, such as postponing oil lease sales, have a long-term, only not short-term, effect.

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"If you lot look at some of the actions taken by the assistants with regard to offshore drilling, drilling on federal lands, the outlook for fossil fuel energies in general, those are impacting the price of crude and expectations about crude oil," said Diskmukes. "(Biden's policies do) have an impact, merely that's not what you're seeing at the pump right now."

Our rating: Simulated

Based on our research, we rate Faux the claim President Joe Biden is to blame for the current college gas prices. The upward tendency in gas costs we come across at present began months before Biden took office. Because of reduced need amid the COVID-19 pandemic, oil companies had to cut back on the amount of rough oil produced. Now with restrictions beingness lifted and more travel happening, the demand has increased, which, coupled with lagging supply, has led to increased gasoline prices. Canceling the Keystone 40 pipeline and other free energy policies enacted by Biden have a long-term effect on crude oil supply but no present impact on gasoline prices.

Our fact-check sources:

American Automobile Clan, accessed June 9, National Average Gas Prices
Jeanette McGee, June nine, Phone interview with USA TODAY
U.S. Free energy Information Assistants, Jan. 5, Crude oil prices briefly traded below $0 in leap 2020 but take since been generally flat
Marking Finley, June 9, Phone interview with United states of america TODAY
Chris Higginbotham, June 9, Electronic mail interview with United states TODAY
USA TODAY, May 12, What you demand to know virtually the Colonial Pipeline cyberattack, gas prices, shortages
Us TODAY, Nov. 6, 2015, Obama assistants rejects Keystone pipeline
United states of america TODAY, March 24, 2017, Trump grants Keystone permit, declares 'a great 24-hour interval for American jobs'
Associated Press, June nine, Keystone Twoscore pipeline nixed after Biden stands firm on permit
Associated Press, Jan. 20, Keystone Xl pipeline halted as Biden revokes permit
David Dismukes, June 9, Phone interview with USA TODAY
Associated Press, Feb. 12, Interior postpones March oil leases onshore and offshore