Why gas prices are ticking back up and why that's a problem for Biden and the Democrats




  • In Business
  • 2022-10-06 20:34:48Z
  • By USA TODAY

WASHINGTON - Gas prices are creeping back up again, taking a bite out of consumers' wallets and causing problems for President Joe Biden and congressional Democrats with just a month to go until the midterm elections.

Tight supply and increased demand as more drivers fuel up are the main reasons prices have surged seven cents per gallon over the past week, according to AAA. The national average was $3.86 per gallon on Thursday, well below the record-high $5 per gallon prices consumers were paying at the pump back in June.

Even so, consumers are paying 64 cents more at the pump than a year ago. And in California and several other West Coast states, the average price has soared to over $5 per gallon.

The latest

  • Prices could jump even higher following Wednesday's announcement that the OPEC and its oil-exporting allies would cut oil production by 2 million barrels per day.

  • OPEC said its decision was based on the "uncertainty that surrounds the global economic and oil market outlooks."

  • Oil is trading well below its summer peaks because of fears that major global economies such as the U.S. or Europe will sink into recession due to high inflation, rising interest rates and energy uncertainty over Russia's war in Ukraine.

  • In Washington, President Joe Biden told reporters his administration is looking for ways to bring down gas prices following OPEC's announcement.

Gas prices over $7 a gallon are displayed at a Chevron gas station on Oct.
Gas prices over $7 a gallon are displayed at a Chevron gas station on Oct.  

Biden, OPEC, Congress: What's about to happen?

Biden has ordered the release of another 10 million barrels from the U.S.'s Strategic Petroleum Reserve next month to help lower gas prices for American consumers and will continue to direct releases from the emergency stockpile "as appropriate," the White House announced Wednesday.

It's not the first time Biden has tapped into the strategic reserves to curb rising gas prices. In March, as prices at the pump were soaring across the country, Biden ordered the release of up to 180 million barrels of oil from the emergency reserve over six months.

The Biden administration also is calling on U.S. energy companies to keep bringing pump prices down by closing the gap between wholesale and retail gas prices so that American consumers can pay less at the pump.

In addition, the administration plans to consult with Congress on additional tools and authorities to reduce OPEC's control over energy prices, said Brian Deese, who heads the White House National Economic Council.

OPEC's decision to cut production has renewed calls for Congress to pass bipartisan legislation that could open up the oil-producing alliance to antitrust lawsuits. The oil cartel's members continue to rake in huge profits, earning about $570 billion in net oil export revenue last year, according to the U.S. Energy Information Administration.

The No Oil Producing and Exporting Cartels bill, known as NOPEC, would change federal antitrust laws that protect OPEC members and their national oil companies from lawsuits. The changes would allow the U.S. government to sue the oil cartel for price fixing and market manipulation.

The bill already has cleared committees in both the House and the Senate and is awaiting a vote in both chambers.

Why rising gas prices matter: Inflation already taking toll, midterm elections loom

Rising gas prices inflict pain on American consumers who already are feeling squeezed from higher costs of food, rent and health care. Consumer prices in August were 8.3% higher than a year ago - a slight drop from the 40-year high recorded in June.

For Biden and Democrats, higher gas prices are a political problem. Gas prices in the U.S. are driven by the market, and there's not much that Biden or any other president can do to lower them. But angry voters often take out their frustrations on whoever is in charge, which could spell trouble for Democrats as they defend their narrow majorities in the House and the Senate in the Nov. 8 midterm elections.

What Biden, Bernie Sanders and experts are saying

  • "We are looking at alternatives - we haven't made our minds up yet," Biden said, referring to his administration's efforts to find ways to lower gas prices.

  • "OPEC's decision to cut back on production is a blatant attempt to increase gas prices at the pump that cannot stand," Sen. Bernie Sanders, I-Vt., wrote on Twitter. "We must end OPEC's illegal price-fixing cartel, eliminate military assistance to Saudi Arabia, and move aggressively to renewable energy."

  • "The production cut will also cause a major backlash in Washington," said Ben Cahill, a senior fellow in the Energy Security and Climate Change Program at the Center for Strategic and International Studies in Washington. "Lawmakers are already calling for a reevaluation of the U.S.-Saudi relationship after President Joe Biden's visit to the kingdom in July failed to produce tangible benefits."

  • "We face a growing energy crisis driven by geopolitical instability, and U.S. policymakers should be doing everything in their power to produce more energy here in America, not urging foreign regimes for more oil," said Mike Sommers, president and chief executive officer of the American Petroleum Institute, a trade association for the U.S. oil and natural gas industry.

  • "The vast majority of Americans - Democrat and Republican - support unleashing our own domestic energy resources, yet this administration refuses to budge," said Akash Chougule of the political advocacy group Americans for Prosperity

Want to know more?  Here's what you missed

Why are gas prices going up? More pain at the pump as OPEC cuts oil production by 2 million barrels

California gas prices are soaring again. 'Welcome relief' is coming.

Is Biden to blame for higher gas prices? Drivers pay more in 93 countries.

A 'sharp rise' in gas prices.  Biden tells oil companies to cut costs for Americans

Michael Collins covers the White House. Follow him on Twitter @mcollinsNEWS.

Contributing: Jessica Guynn and Maureen Groppe

This article originally appeared on USA TODAY: Gas prices rise, OPEC to cut production: Why it's a problem for Biden

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