Tracking the Price of Gasoline

March 16, 2022

Hugh Daigle is a Professor at the University of Texas.

Hugh Daigle on Twitter:

I’ve been getting a lot of requests to explain what’s going on with oil/gasoline prices rn, so I made a plot of weekly average gasoline prices and WTI spot prices (both from @EIAgov) going back to May 2020 with some key dates. 

First, notice how correlated the two trends are. Remember, according to EIA as of January 2022 56% of the cost of gasoline was crude costs:

There are 3 things going on: COVID, domestic politics, and international politics. Look at the increase in prices from November 2020 through January 2021. This corresponded w/ anticipated change in presidential administrations (& more COVID relief $$) and both @pfizer and @moderna_tx reporting vaccine test results. However, after the American Rescue Plan (ARP) was enacted in March 2021, the rate of increase really slowed down. I don’t have a good explanation for this.

Note the drops in WTI price corresponding to the Delta wave and the first reports of Omicron, along with plateaus in gasoline prices.  

The start of the big price increase we are dealing with today seems to coincide with the @nytimes article that really first laid bare the US intelligence on what Russia was planning wrt… 

And then a huge increase after the start of the invasion. So, it’s not really one thing driving gasoline and oil prices: it’s domestic and global politics superimposed on a background of COVID recovery.

So then I get this email “Survey” from my singularly mediocre Republican Rep, John Moolenaar. (Michigan – 4th)

Which prompts several questions from me, which I promptly posed in a letter to the local paper:

How has the cancellation of the Keystone pipeline affected the price of gasoline, since the pipeline would not even go into service till years in the future, and would carry oil mostly for export?

How does “considering the shutdown of Line 5” affect the price of gasoline?

Why hasn’t the oil and gas industry acted on the 9000 available leases on public land they already have access to?

If gasoline prices are the fault of President Biden, why have gasoline prices risen in all countries across the world?

The price of oil has dropped 25 percent in recent weeks, will Mr Moolenaar now be thanking President Biden for bringing down the price of oil?

In a time of pandemics and a serious war against democracy, when fossil fuels are being used as a weapon against American consumers, why don’t oil companies forgo a fraction of their record profits to give  consumers a break?

Why does Rep Moolenaar not support a windfall profits tax to return some of that record revenue to hard pressed consumers in this time of crisis?

Why does Rep Moolenaar not support a rapid transition to renewable clean energy, as Europe is now doing, to free American consumers from the tyranny of global oil markets and endless oil wars?

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