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đź“Ś Gasoline prices have risen since the coronavirus pandemic hit the United States in early 2020, under President Donald Trump.
đź“Ś According to experts, this was due to the fact that oil production was reduced at the beginning of the pandemic, and when economic activity returned, the demand for gasoline increased, but not its supply, so prices increased.
đź“Ś The experts consulted also point to the tensions between Russia and Ukraine, under the presidency of Joe Biden, as a trigger for a further increase in gasoline prices.
Gasoline prices have increased since the pandemic hit the United States in early 2020. Many posts on social media talk about this topic.
The viral posts even compare the price of gas during Donald Trump's administration and the supposed increase that occurred during Joe Biden's presidency, as seen in the image below.
Furthermore, as explained in this note PolitiFact, a media ally of Factchequeado, concern about rising gasoline prices also reached traditional media such as Fox News. Driver Bill Hemmer said on March 1, "Gas prices are going up. If you don't think Central America realizes that, think again. We're seeing prices now that frankly we haven't seen in years."
In this article we tell you what happened to the price of gasoline during the Trump and Biden governments; how they compare historically and what is causing the price movements.
Gasoline prices during the Trump and Biden presidencies
Right at the beginning of the pandemic, under the Trump Presidency in April 2020, the price of gasoline was $1.93 per gallon in its average retail gasoline sales price. From there it started to rise.
In January 2021, when Biden was inaugurated, gas prices were already at $2,42 per gallon.
As of March 2022, prices were above $4 per gallon, on average.
As Univision's El Detector, another media ally of Factchequeado, explained in this article, the average price of gasoline in the United States in the week of March 7 to 14 was the highest in the history of the country since these measurements were made (1990), according to the Energy Information Administration (EIA).
According to data from the US Energy Information Administration, prices increased about 70% from when Biden took office in the White House in January 2021 to the latest available data from April 2022, but had already begun to rise under the presidency. of Trump throughout the year 2020.
- Why is the price of gasoline rising?
Why gasoline prices rose
Dean Baker, economist and co-founder of the Center for Economic and Policy Research (CEPR), explains to Factchequeado that there is a world price for oil and that the increase in gasoline prices in the United States is due to the fact that this price “went from about $50 a barrel before the pandemic to about $100 a barrel” and “each increase $10 adds approximately 25 cents to the price of a gallon of gasoline.”
The problem, according to Baker, is that global producers reduced their production during the COVID-19 pandemic and did not return to previous levels.
That is, demand increased after the months of global confinement and, however, supply did not increase enough, making its price more expensive.
As pointed out in this article Forbes Robert Riaper, a chemical engineer who works in the energy industry, in 2020 the pandemic “crushed oil demand.” Some oil companies closed.
As people returned to work and traveling after lockdown, demand recovered, but supply did not.
“Following the 2020 production collapse, the United States has been playing catch-up as demand recovered. Rising oil prices, in response to insufficient supplies, are the predominant reason for rising gasoline prices.” This was what Riaper assured.
He also explained PoliticalFact in this note that the Rising gas prices are not Biden's fault.
“Biden's policies may eventually affect gas prices. “Any impact is not detectable in the recent changes in the price of gas.” This was pointed out by Mark Finley, a member of the Center for Energy Studies at Rice University, and Patrick De Haan, head of petroleum analysis at GasBuddy. Additionally, American companies are investing less in finding new sources of oil.
This is due to a combination of factors, including low oil prices over the past year.
“Oil companies were hit hard in 2020. They are not in growth mode. They are in survival mode,” De Haan told PoliticFact.
Gregory Nemet, professor of energy policy at the La Follette School of Public Affairs at the University of Wisconsin-Madison, tells Factchequeado Another reason for the increase in prices during the Biden presidency: the Russian invasion of Ukraine.
Since last November, according to the expert, oil prices have risen 30% and gasoline prices have doubled.
For Nemet, these increases are due to a combination of two factors: greater demand for gasoline due to the recovery after the COVID-19 pandemic and concern, in advance, about interruptions in the supply of oil due to tensions between Russia and Ukraine and, later, to the invasion of the country.
“The bottom line is that these two global forces: the economic recovery and the Russian disruption are what have driven up gasoline prices,” he says.
And he adds: “Given the situation, I would say that very little is due to the policies of the Biden administration.”
Trey Cowan, an oil and gas industry analyst at the Institute for Energy Economics and Financial Analysis (IEEFA), explains to Factchequeado that war usually leads to disruptions in production and, since markets look to the future, speculators react in advance.
“The ongoing war creates more uncertainty about future shortages and swings in oil and natural gas prices reflect the markets' reaction to daily news.”
Like other experts consulted, Cowan believes that “the backdrop for why oil prices are extremely high has little to do with US energy policies established by the executive or legislative branch.”
In this sense, Riaper points out Forbes that Biden's decision to stop importing Russian oil was the first that did have an immediate impact on raising oil prices.
It is also possible, according to the expert, that the release of oil from the United States' Strategic Petroleum Reserve (SPR) - a set of underground salt caverns located in Texas and Louisiana that can store more of 700 million barrels - has temporarily lowered gasoline prices.
For his part, Baker affirms that Biden's policies have lowered the price of gasoline given that “Biden's release of reserves has the same impact on oil prices as an increase of 1 million barrels per day in the United States, which would be approximately the difference between our pre-pandemic production and current production.”
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