There is a theory that emerges repeatedly, the crux of which is that gas prices tend to fall in the run-up to elections, to the advantage of the incumbent president. The implication is that the president can control gas prices before voters go to the polls.
But is there any merit to this theory?
First of all, there is no doubt that high gas prices can represent an electoral problem for presidents and their parties.
That’s why Republicans have hit President Joe Biden with attacks as gas prices have risen 60 cents since the start of 2024, with the national average now at $3.67. Democrats took even more heat in the summer of 2022, before the midterm elections, when gas prices rose to a record high above $5 in June.
Conversely, low or declining gas prices can be a great talking point for ruling parties. It should therefore come as no surprise that the Biden administration is trying to assure voters that it will continue to do everything it can to make gas prices affordable.
Denton Cinquegrana, chief oil analyst at the Oil Price Information Service (OPIS), says presidents don’t actually have much power to influence gas prices. But he fully understands why politicians try to take credit for low prices and try to pin the blame on their opponents when costs are skyrocketing.
During the latest midterm election campaigns, Democrats touted the sharp drop in gas prices in the second half of 2022, when oil prices returned to more normal levels after the initial reaction to the US invasion of Ukraine. Russia. If prices drop between now and November, expect the Biden campaign to make it a topic of discussion again.
“If I were the president or if I ran the world and gas prices went down ahead of the election, I would take 100% credit for it – even though I had nothing to do with it,” Cinquegrana says.
He says it’s true that gas prices typically drop before the November election. But there’s a big problem: Gas prices typically drop even in the fall, when there are no elections.
Why do gas prices drop in the fall?
There are two main reasons for this seasonal decline in gas prices in the United States: 1) gas demand typically declines after Labor Day following the summer driving season; and 2) Every fall we switch from summer fuel to winter fuel, and winter fuel tends to be a little cheaper.
These two factors best explain the drop in prices before the elections, Cinquegrana said. Given that our national elections are held in even-numbered years, the fact that fall price drops are common even in odd-numbered years is a good indication that the trend is not the result of politicians pulling strings to lower gas prices earlier of national elections.
Eric Lee, Energy Strategist at Citigroup, said U.S. gas prices move up and down with global market trends. For the most part, Mother Nature, geopolitics and global oil supply and demand determine consumer gas prices, not the policies of American presidents and politicians, he said.
Gasoline is made from crude oil and other petroleum liquids. According to the US Energy Information Administration, crude oil prices are responsible for 57% of the cost of a gallon of gasoline to drivers at the pump.
Weather events can disrupt oil and gasoline infrastructure, driving up prices, and seasonal conditions impact our driving habits and fuel demand. (Gas prices have risen recently due to increased spring demand and the shift to summer gasoline, among other factors.)
Lee said the theory that gas prices drop before elections is not supported by empirical data. Looking at changes in gas prices in the months leading up to the midterm and presidential elections, he said he was unable to spot a clear pattern of movement in either direction, beyond the seasonal trends we see each year.
“It’s pretty all over the place if I look at three months before November and six months before November since 1993,” Lee said. “There were some big drops around 2007 and 2008, but that was really the great financial crisis.”
Does the president control gas prices?
Lee explained that while it makes sense that American politicians would want to try to lower gas prices before the election, “there are very limited levers” to actually do so.
In 2022, the Biden administration’s decision to release oil from US strategic reserves, in coordination with dozens of other countries releasing their own reserves, has undoubtedly led to lower gas prices than we would have otherwise seen, has stated.
“This was a coordinated and strategic release of oil reserves, which was unprecedented in terms of the number of countries involved,” Lee said. “It was effective.”
Cinquegrana agrees that releasing oil from reserves is a rare case of an administration’s action having an immediate and direct impact on gas prices.
“I would say that the strategic reserve releases, I don’t think they necessarily lowered gas prices, what I think they did was they kept prices from going up even more,” he said.
It is currently unclear whether there will be further releases of the strategic reserves before the November elections. Last week, when asked whether such a move was on the table, White House officials said Biden wants gas prices to “remain affordable” and will “do what he can to make sure” that happens, according to CNBC.
According to JP Morgan, gas prices would need to approach $4 for the chances of further releases from strategic reserves to increase.
Beyond releasing oil from reserves, presidents have few other options to influence gas prices. The Biden administration has called on OPEC+ to increase its oil production, but the organization continues to limit the amount of oil it is releasing to keep prices higher.
The administration has also sought to increase domestic production, and the United States is currently producing record levels of crude oil. However, increasing oil production cannot be achieved overnight. It takes years to make marginal gains, so it would be difficult – if not impossible – to use it as a strategy to tip the scales of elections.
Conclusion on gas prices and elections
Even though the president has very limited ability to control gas prices, voters don’t necessarily see it that way. Experts say voters care so much about the cost of gas that the price trajectory in 2024 could help determine the outcome of the election.
“President Biden’s expected re-election relies in part on gasoline prices remaining in the $3-per-gallon range. All things being equal, if gas prices returned to near $4 a gallon, Trump would win,” Moody’s Analytics said in a report earlier this year.
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