Whenever election season hits, everyone gets up in arms about gas prices as a proxy for the cost of living. This year, average gas prices nationwide may well drop below $3 before election day, but don’t thank the current administration. In fact, don’t thank domestic politics at all.
According to data from GasBuddy, gas prices have been trending downward for two weeks. It’s sitting at $3.07 right now, which is a drop of nearly 40 cents from this time last year. Yet, GasBuddy warns against blaming the drop on domestic politics. Instead, it’s foreign policy that’s dictating prices:
“The national average price of gasoline has continued its decline over the last week, as expected, as oil prices have sunk due to Israel avoiding attacks on Iran’s oil infrastructure, and seasonal decreases in demand are pushing gasoline lower, as is normal for this time of year. In addition to gasoline prices falling to their lowest level since January, the average price of diesel has now fallen to its lowest level in over three years,” said Patrick De Haan, head of petroleum analysis at GasBuddy. “While many Americans may incorrectly credit the upcoming election for the declines, politicians have little influence over the strong seasonal forces that drive prices lower in autumn. With winter gasoline soon to reach the rest of California, and demand continuing to decline as Americans grapple with colder weather, the drop in demand is pushing gas prices down — not politicians on either side, as much as they might like to think they do. I expect the decline in gas prices will continue into and even beyond the upcoming election.”
Those “seasonal forces” include cheaper winter-mix gas as well as the drop in driving that happens over the winter months. When you’ve got a less expensive product and lower demand, gas stations simply can’t charge the same amount they would in July. This happens every year, unrelated to political cycles, and will likely continue to happen regardless of who’s elected next month.
While Presidents have some level of control over foreign policy, with regard to the middle east, they don’t have the sort of levers that many believe they can pull with regard to pricing. So, when your gas bill drops on your next fill up, you know who to thank: Market forces.