Can the President Control Gasoline Prices?

There's very little that any U.S. president can do to affect gas prices in the short term. Learn why in this episode of BrainStuff, based on this article: https://money.howstuffworks.com/president-gas-prices.htm

See omnystudio.com/listener for privacy information.

Episode Transcript

Speaker 1 (00:01):
Welcome to brain Stuff, a production of I Heart Radio,
Hey brain Stuff Lauren Vogelbaum. Here, the critics of any
US president are quick to blame the commander in chief
for things that are totally beyond their control. Of course,
presidents and their supporters are equally quick to take credit
for things that are beyond their control, and the price

(00:22):
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

(00:43):
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.

(01:08):
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.

(01:32):
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

(01:53):
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

(02:16):
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.

(02:39):
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

(03:00):
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

(03:24):
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

(03:46):
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

(04:08):
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,

(04:31):
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

(04:51):
production of I Heart Radio in partnership with how stuff
works dot Com, and it's produced by Tyler Klang. Four
more podcasts from my heart Radio. Visit the iHeart Radio app,
Apple pod casts, or wherever you listen to your favorite shows.

(05:13):
H