Does the President Influence Gasoline Prices?

Source 1: In 2012 the New York Times published an article titled “Why Gas Prices Are Out of Any President’s Control.” The author is an economist and stated that the United States is consumes twenty percent of the world’s oil. The U.S. only holds two percent of the worlds oil reserves. Oil is a global market and our influence within that market is to small, due to our limited reserves, to make a difference in the average price of gasoline. This article was written during the Obama administration. Many were complaining about the high gasoline prices at the time and blamed Obama for the problem. The author of this article presented the point that even when Bush, an advocate for low gasoline prices, was president gas increased from under two dollars to more than four dollars a gallon.

 

Source 2: Business Insider stated that the according to the EIA (Electronic Industries Alliance), two-thirds of the cost of gasoline is determined by crude oil cost. This means one-third of the cost can be a result of taxes, refining, distribution and marketing. Overall, this means the President has very little if any control over gasoline prices.

 

http://www.businessinsider.com/factors-that-determine-gas-price-2012-5

 

Source 3: Investopedia published an article that echos source 2 by stating that crude oil’s price plays into about sixty-eight percent of the retail cost of gasoline. This information was published in 2010. Taxes were the second largest factor, coming in at about fourteen percent of the retail cost. The article also stated that when crude oil costs were down between the years 2000 and 2007 the taxes were up to twenty-four percent of the retail cost. This makes it clear that the government has tried to combat the increased cost of crude oil with lower tax rates on gasoline.
What Determines Gas Prices? http://www.investopedia.com/articles/economics/08/gas-prices.asp#ixzz4wSQzg0yk

 

 

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