The problem for Democrats is that voters tend to blame whoever is in power when things are going badly, and inflation and high gas prices could cost them control of both houses of Congress next year.
As the war in Ukraine has dragged on, Biden has repeatedly warned Americans that they may see consequences at the pump with Russian President Vladimir Putin disrupting global supplies
And with the cost of a gallon eclipsing $4 in the last week, Biden castigated oil companies for profiteering at the pump.
“Oil and gas companies shouldn’t pad their profits at the expense of hardworking Americans,” Biden tweeted Wednesday.
Democrats have seized on a recent decline in the price of crude oil as evidence that greedy gas companies are hoarding profits.
“Over the past few weeks — as war in Ukraine began — the price of a barrel of oil rose precipitously. That immediately translated to oil and gas companies raising the price for Americans at the pump,” Senate Majority Leader Chuck Schumer (D-N.Y.) said in a floor speech on Wednesday. “But something is happening that Americans shouldn’t overlook: Over the past few days, oil prices have actually been decreasing, but the price of gas at the pump has not.”
Schumer vowed to haul in CEOs of oil and gas companies before the Senate to testify, accusing them of reaping billions of dollars in profits “instead of finding ways to give Americans a break at the pump.”
White House officials have similarly been calling the rise in gas prices “Putin’s price hike.” The war disrupted Russian oil imports to the U.S., and Democrats joined Republicans in calling for an outright ban on Russian oil.
But after Biden enacted such a ban last week — which he had resisted doing because it would increase domestic gas prices — Republicans blamed the higher prices entirely on Biden.
Even before Russia’s buildup of troops along its border with Ukraine last year, Republicans had been blaming Biden for the increase in fuel costs, which jumped as COVID-19 restrictions were lifted and the economy reopened.
High gas prices are part of the worst overall inflation surge since 1982, one that has prompted the Federal Reserve to try to slow the economy in order to bring prices down. The Fed has blamed supply chain problems related to the pandemic, but Republicans have spent the past year slamming the American Rescue Plan, which they say gave the American people too much money to spend.
“The president is literally gaslighting the American people. He feels that if he says it enough, people are going to believe that fuel prices are Putin’s fault,” Sen. Joni Ernst (R-Iowa) said Wednesday.
As for the recent decline in crude oil prices, it actually has resulted in a slight decrease in gas prices, shaving off four cents per gallon this week, according to AAA. The cost of a gallon rose 70 cents in the first two weeks of the war.
But the oil price decline, which apparently resulted from falling demand due to a COVID-19 outbreak in China, might not last.
“There isn’t a significant expectation that oil prices are going down substantively, and there’s further fighting in Ukraine,” Diana Furchtgott-Roth, an adjunct economics professor at George Washington University, said in an interview. She added that the White House could lower oil price expectations by boosting domestic production and imports from Canada.
The American Petroleum Institute, an industry trade group, said it’s typical for retail prices to fall more slowly than they rise.
“As we’ve seen in the past, it takes time for changing market conditions to work through the supply chain and for the price of crude oil to be widely reflected in the price we pay at local gas stations, more than 95 percent of which are independently owned small businesses and not operated by oil companies,” API’s Frank Macchiarola said in an email.
White House press secretary Jen Psaki said this week gas prices should fall faster.
“Retail gasoline prices are updated at least daily, and if gas retailers’ costs are going down, they need to immediately pass those savings onto consumers,” Psaki said Wednesday.
Separately, assistant press secretary Vedant Patel pointed to recent oil company pledges to plow profits into stock buybacks instead of boosting supplies. The three biggest oil companies have seen their profits jump last year as gas prices surged.
The furious efforts by Democrats to control the message on high gas prices is a recognition of the political headwinds they face going into the midterms.
According to a recent Yahoo/YouGov poll, 30% of Americans said Biden is at fault for high gas prices, while 23% pointed their finger at oil and gas companies.
The administration has sought to quell concerns by announcing a release of more than 60 million barrels of oil from strategic reserves around the world, as well as calling on oil producers to pump more oil.
Democrats have also discussed ideas for how to blunt the high prices at the pump, including approving a temporary reprieve from the federal gas tax, and sending Americans direct payments to help offset their fuel costs. But there’s little agreement in Congress on any of the proposals.
Some governors have already moved to suspend gas taxes in their states despite the fact that it’s been panned as a “gimmick” by experts and lawmakers of both parties. Passing new cash assistance will be very difficult in the Senate, where Republicans and even some Democrats have put their foot down against any new spending that could lead to higher inflation.