What’s Left – Pain At the Pump: It’s Not Biden’s Fault

Whenever things go wrong, it is human nature to find someone else to blame. When those problems are national ones, who better to blame than the American president? It is inevitable that the president receives the blame during hard times and not enough credit during good times. Surely the most visible and prominent person in American politics must have some involvement when something goes wrong!

Stickers on Sunoco gas pumps sarcastically saying “Thank you, Joe Biden” are only the latest manifestation of this phenomenon. Since the end of the year 2021, statewide gas prices have inched slowly upward; they began to accelerate throughout March 2022, currently hovering around $5.70 per gallon in the state of California according to the AAA Gas Prices Map. Madison County (where Colgate University sits) is one of the hardest-hit counties in New York State, with average prices at $4.20 per gallon according to the same map.

High gas prices are frustrating for everybody, and most particularly for lower-income families living in rural areas such as Hamilton, N.Y., where longer distances between Point A and Point B are just a part of daily life. But who exactly is to be blamed for this?

While there are many critiques to be had of the Biden administration, inflation and high gas prices are not the faults of the president himself. Even as the business cycle carries itself through periods of boom and bust (with the latest bust triggered by the onslaught of COVID-19 in March 2020), several economic forces within the free market system have converged at similar times to generate that $4 price tag for Regular at the Hamilton Speedway. There is no Wizard of Oz standing behind a curtain and manipulating such widespread economic trends. There are only the laws of supply and demand, which have dictated the current crisis for much longer than Biden has been in the White House.

High gas prices have everything to do with unstable energy markets during the coronavirus pandemic. According to economists from the Wall Street Journal, the U.S. produced approximately 19 million barrels of refined petroleum per day prior to March 2020. Due to nationwide quarantining and a broad international drop in the demand for gas, oil producers in a variety of countries dramatically cut back on supplying the global market with their stocks of refined petroleum. Saudi Arabia and Russia, whose economies are both so dependent on their respective oil-producing capacities, found themselves engaged in a competitive struggle that resulted in an international flood of cheap oil and the sharpest decline in prices since the Gulf War, again according to the Wall Street Journal. To this day, the United States still has not reached pre-pandemic production levels.

Fast forward to 2021. Oil production has most certainly been rebounding from where it was throughout all of 2020, as more and more people in oil-dependent countries have been driving to work and airlines have resumed their regular schedules. As a result, oil prices have increased over time, but producers have not been able to keep pace with the renewed demand, resulting in a supply shortage. This sudden vacillation between international surplus and international shortage of refined petroleum has produced a highly unstable energy market with prices that are currently threatening to outstrip consumer purchasing power. In other words, as demand for oil has increased, prices have not kept pace with consumer spending because there is still an international shortage in supply of refined petroleum.

Political developments in 2022 (namely, Russia’s invasion of Ukraine this previous February) have only contributed to the rise in oil prices and shortage of supply. According to a report from the Wall Street Journal, the invasion removed at least 3 million daily barrels of Russian oil from the global supply. This is without counting the fact that much of the international community, including the U.S., has boycotted Russian petroleum products and continues to do so, which has only inflamed domestic prices even further. To a great extent, the American consumer is indeed biting the bullet of Vladimir Putin’s genocidal actions in Ukraine. Again, these increases are most oppressive for lower-income families in rural communities where no other option besides personal car usage is available for travel.

For his part, Biden has heard the suffering of American consumers at the pump and done what he can in order to alleviate it. Along with other Western leaders, he has released millions of barrels of oil from the U.S. Strategic Reserve in order to increase the global supply. The current crisis also presents an opportunity for the Biden administration to develop a new relationship with Venezuela, an oil-producing nation that has been under American sanctions since 2008, according to the Wall Street Journal. Certain governors and state legislatures, mostly Democratic, have also called for partially or entirely repealing state gas taxes to relieve some of the burden. Biden has also resisted the pressure, at least thus far, to expand offshore oil drilling, something which surely would benefit fossil fuel executives much more than it would consumers. 

The Biden administration is to be commended for its handling of the current energy crisis. Indeed, those stickers on the gas station pumps thanking the president are actually entirely appropriate, although maybe not for the reasons that they were placed there.