Gasoline Prices Have a Political Impact

It seems unnoticeable from campaign speeches. However, gasoline prices are lower over the last several days.

According to surveys, as the presidential election becomes nearer, topping the list of voters’ worries are the weak economy and the high unemployment. For this reason, even a slight drop in gasoline prices can lead to huge political effects.

In general, any reduction in gasoline prices could be advantageous to President Obama over the bold GOP contender Mitt Romney. After reaching a gasoline price of around $4 per gallon in the early parts of the spring this year, the latest national average is lower by eight cents compared to the previous month, at a rate of $3.83 per gallon.

The drop has not yet registered politically. Every party blames each other whenever high gasoline prices start bothering the voting public.

Republicans hold President Obama responsible for policies that they think are restricting the oil production of the United States and pushing energy prices to rise further, such as restricting the Keystone XL pipeline from Canada to Texas. Moreover, Republicans claim that the president is taking credit for increases in production that should be owed to his predecessor, former President George W. Bush.

Romney proclaims that gasoline prices just keep on moving higher under President Obama.

Obama aims to provide more authority to regulators to prevent speculators’ price manipulation that he believes can earn millions while putting families in the US in a disadvantaged position. He also attacks the opposition of the GOP to ending breaks in taxes for gas and oil companies.

Gasoline prices are partially dropping due to the disappointing economic data in the United States and China, along with current debt problems in Europe, which lowers current crude oil prices. Furthermore, vehicles have become more efficient in their fuel consumption and Americans are not driving as often.

The average gasoline prices are still higher by 55 cents compared to its rate at the start of the year. However, in politics, just like with economics, the news can be beneficial.

By: Chris Termeer

Chris Termeer

Chris Termeer is an oil and gas consultant, industry commentator and analyst. His book, Fundamentals of Investing in Oil and Gas provides a comprehensive overview of all aspects of the oil and gas industry, including exploration, drilling, production, storage, transportation and refining, to name but a few.

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