GasBuddy — a PDI Technologies company — recently hosted a webinar regarding the future of gas prices in the midst of a climactic election year. The consensus from the fuel-focused technology company is that, in short, the election may not affect prices as much as the average consumer may think.
According to Patrick De Haan, head of petroleum analysis, GasBuddy, there are a myriad of factors that contribute to gas prices, with one of the most significant being action at the state level.
“Due to many complex factors — Ukraine, energy prices and the pandemic, among others — consumers have seen higher volatility at the pump in recent years,” said De Haan. “Our goal with this guide is to provide clear, accurate information to help educate the public about what factors influence gas prices at any given time, whether it is an election year or not.”
While both President Biden and former President Trump may have different ideas for the future of oil and gas, it is not solely on the president to determine.
One point that De Haan emphasized is that the oil market is not strictly an American market, but a global one. With that being said, different energy policies by the president can still have longer-term effects on the market. Where short-term changes come into play is at the state level, among other factors.
“This is a global commodity,” said De Haan. “It’s rather silly to think that one president could control the price of a global commodity.”
In addition to state-level policy, seasonality also has an effect on prices.
“The gas formula mandated to reduce smog in warmer summer months is more expensive to produce, leading to higher seasonal pricing,” GasBuddy wrote in a statement.
GasBuddy vehemently predicts that pump prices will decrease come the fall season.
America’s Oil And Gas Capabilities
Another topic that was discussed in the webinar was the Department of Energy’s Strategic Petroleum Reserve (SPR).
The SPR is the world’s largest supply of emergency crude oil. Established primarily to reduce the impact of disruptions in supply of petroleum products, the federally-owned oil stocks are stored in massive underground salt caverns at four sites along the coastline of the Gulf of Mexico, according to the Office of Cybersecurity, Energy Security, and Emergency Response.
The SPR has an authorized storage capacity of 714 million barrels.
One key point to note, mentioned De Haan, is the difference between crude oil and gasoline. While crude oil is kept in the SPR, reserve gasoline is kept in the Northeast Gasoline Supply Reserve (NGSR).
Both President Biden and President Trump have previously released millions of barrels of crude oil during their presidencies. When President Trump was in office, he released 200 million barrels of oil because, De Haan said, he felt it was unnecessary to have. The release was signed off on by Congress in 2017.
President Trump attempted to shut down the NGSR all four years that he was in office, as the oil stocks have costed taxpayers nearly $200 million in the past 10 years to maintain it.
Under President Biden, roughly 180 million barrels were released to aid in the war in Russia and Ukraine. Since then, he has been refilling the SPR and has canceled Congress-mandated sales.
De Haan noted that there would need to be a very drastic change in policy for any short-term change to really take effect.
“While the politicians may try to convince you that they have something up their sleeves, keep in mind oil and gasoline are global markets that are not just subject to the whims of a president.”
