Skip to content

Gasoline prices just keep plummeting

Published on 23 Comments on Gasoline prices just keep plummeting

Here's the average price of gasoline as of August 1:

Adjusted for inflation, the price of a gallon of gasoline has dropped nearly a dollar. Isn't that great?

The are only two kinds of people unhappy about this. The first are climate hawks who think gasoline should be going for about ten bucks a gallon in order to keep drivers off the road.¹

Second, and far more numerous, are conservatives who are suddenly discovering that we all know the president has no influence on gasoline prices. It's funny that they didn't seem to know that when prices were going up.

And anyway, maybe the president does have some influence on gasoline prices. He can jawbone OPEC, which has worked moderately well lately. OPEC production is up and global prices of crude are down. And there's also President Biden's move to sell oil from the Strategic Petroleum Reserve, along with his recent decision to guarantee repurchases in future years, which is likely to stabilize the market. I wasn't a big fan of this move, but who knows? Maybe it's working better than I expected.

¹During 2020-21, the price of a gallon of regular increased from $2 to above $3 and vehicle miles went up and up anyway. By the end of 2021 VMT was nearly at its pre-pandemic level even though gasoline prices were a buck higher:

But how about $5 gasoline? Did that make a dent in how much people used their cars? We don't have travel data yet from March-June, when prices went up from about $3.50 to $5, so we don't know. But retail sales data suggests only a 15% decline in miles traveled—and even that was probably only a short-term effect. I'll bet that in the long term it really would take ten-dollar gasoline to make much of a difference.

23 thoughts on “Gasoline prices just keep plummeting”

  1. rick_jones

    As for the sales from the strategic petroleum reserve, you should plot them against the price of oil/gasoline before giving them credit for affecting prices at the pump.

  2. climatemusings

    "But I'll bet it didn't. It really would take ten-dollar gasoline to make much of a difference."

    I'll note that the elasticity of gasoline consumption with price has been studied, and what researchers have found is that in the short term, gasoline consumption is pretty inelastic (people still have to go to work, they have previously scheduled vacations, etc. etc.), but in the longer term, there is more elasticity (people will buy more fuel efficient cars when the price is higher, buy houses with shorter commutes, etc.). So I'd be interested in looking at the correlation between fuel price and car mileage.

    Of course, the pandemic makes everything weird.

    1. Atticus

      I'm guessing the studies you mention consider "normal" fluctuations in gas prices (i.e. changes of a few dollars). $10 per gallon is completely theoretical since we've never had them that high so we don't know how driving habits would be affected.

  3. sturestahle

    $10 gallon is to cheap it needs to be more like $11 gallon to bring emissions down sufficiently according to experts.
    I read an interesting report (in Swedish) recently on price of gas. People are whining and whining about it over here as well.
    The report was made by two scientists at Stockholm school of business (hardly a place known to be fostering left wing extremists ) . In short was the report saying that it was much more expensive to drive a car back in 1991 . The reason it is cheaper today is that the price is much higher on gas (sic!!) Price going up has boosted demand for cars with a much lower mileage.
    Back in 1991 did the average “Mr/Mrs Andersson” driving an average car pay 2/3 of an hour’s salary to drive 100 km today are he/she paying just 1/3 of an hour’s pay to drive the same distance. This has of course also curbed emissions. One must also remember that net value of salaries has been going up.
    Greetings from your Swedish friend

  4. rokeeffeDC

    Lower gas prices are a good thing for the millions of Americans who need to drive for work/errands of daily life or love to drive for pleasure or vacation. I am a conservative but believe that Presidents unfairly take too much blame when the economy is bad and get too much credit when the economy is good--whether democrat or republican. That said, presidents can help or hurt the economy in many ways. We'd have a lot more gas supply if the administration was actively engaged in encouraging, wherever possible, increases in extraction and refining capacity.

    1. MontyTheClipArtMongoose

      LOL, @ you not crediting Gingrich & the Kontract on Amerika Krew for the Climpton Boom, because they reined in his most destructive Democrat shitlib impulses.

      Also, LOL, @ you not crediting the Bush Tax Cuts, for turbocharging America out of Bill Climpton's BIG TECH Recession.

      LOL, again, @ you not scoffing at Barry Obummer worsening the Jimmy Carter-induced Housing Collapse & resulting 2007-08 Recession, with the American Recovery & Reinvestment Act.

      LOL, as well, @ you not toasting Coors Light in your Mc Mansion on the occasion of the Tax Cuts n' Jobz Act passing.

      & LOL, & Double LOL, @ you not thanking Trump for the CARES Act, then not lambasting joebiden for the American Recovery Act. (Plus, joebiden still owes you $2000. Even Trump gave you more!)

        1. MontyTheClipArtMongoose

          Even as he faded from the DC scene after his mollywhopping at the hands of George W. Bush, the midnite ride of algore remains legend.

    2. ColBatGuano

      We'd have a lot more gas supply if the administration was actively engaged in encouraging, wherever possible, increases in extraction and refining capacity.

      Citation omitted.

  7. cld

    Second chart is suggesting that people are driving more than ever while getting nowhere at increasing frequency.

    This has to be a general frustration.

  9. E-6

    I hate to admit it, but I'm chuckling knowing how many performative rednecks and bros in huge pick-ups and "conservative" suburban families who, with only two kids, think they need a Suburban, have all been taking it on the chin while gas is high. F them and their gas-guzzling, emission-spewing vehicles (not to mention how the reduced frontal visibility of these vehicles makes them a danger to pedestrians, bike riders, and small car drivers).

  10. humanchild66

    Auditioning for a new job as at the NY Times:

    "Gas prices are plummeting. Here's why this is bad news for Biden."

    "Are gas prices dropping too quickly?"

    "Why low gas prices won't help Biden"

    "At this point in the Trump presidency, gas was $3/gallon. Trump still lost Congress."

  12. D_Ohrk_E1

    I'll bet that in the long term it really would take ten-dollar gasoline to make much of a difference.

    Or BEVs that are cheaper than ICEs.

Comments are closed.