Who Actually Controls Gas Prices?

Hint: Presidents have little control over gas prices—and neither do convenience retailers.

November 02, 2022

By Jeff Lenard

(Editor's note: This blog was originally published on February 3, 2021, and updated on November 1, 2022, to reflect changes in the retail fueling market, including record gasoline prices.)

ALEXANDRIA, Va.—Let’s start with a basic assumption that we can all agree upon: Politicians and their political parties don’t want to be affiliated with high gas prices.

And that’s fully on display in 2022 with record-high prices and a mid-term election.

Gas prices are the ultimate pocketbook issue that everyone talks about. Songs are written about them. You don’t see that about eggs, bread or milk. Or property taxes, for that matter. Quite simply voters hate high—or rising—gas prices. That’s probably the main reason that the federal gas tax hasn’t budged since 1993 when it was increased to 18.4 cents per gallon.

So given that every politician wants to take credit for keeping gas prices in check, or better, lowering them, and every one running against an incumbent wants to pin blame on the person in charge, it makes sense that politicians would do everything in their power to keep gas prices low. Especially presidents.

So why are they so bad at it?

Actually, it’s not that they’re bad at it. It’s that they have very little control over it. Yes, policies and legislation can certainly play a role, but gas prices are largely dictated by oil prices, and oil prices are dependent upon supply and demand. Presidential control is not as simple as what those posts suggest on social media.

The year 2022 is a perfect example. It’s a mid-term election year in which all 435 members of the U.S. House of Representatives are elected, as well as one-third of the Senate. Everything “hangs in the balance” and “the stakes couldn’t be higher,” exclaim TV newscasters and commercials.

But let’s shift a few months earlier. After the Russian invasion of Ukraine in February, oil prices spiked as concerns mounted over supply, especially because Russia is the world’s third-largest oil producer.

At the time of the invasion, gas prices were about $3.60 a gallon. A week later, they were over $4. President Biden pulled out every tool at his disposal, announcing a record-breaking withdrawal from the Strategic Petroleum Reserve. Yet, oil and gas prices continued to climb higher, topping $5 a gallon nationally in mid-June.

The administration claimed that its quick actions helped reduce gas prices by 40 cents a gallon over what they would have been, but that’s pure speculation, just like the administration’s pronouncements that gas stations, which only average 10 cents per gallon in profit, somehow can significantly drop their prices.

A later withdrawal from the SPR in September barely moved the needle on prices. The releases, while record-breaking, cumulatively represented about two days of world oil supply.

So, is it possible that presidents don’t have much control over prices—and they shouldn’t be praised for price drops or maligned for price increases? (And, for that matter, they shouldn’t malign the retailers who also are not the reason for rising prices.)

Find out in this month’s Convenience Corner blog post “Does the President Control Gas Prices?”

Jeff Lenard is the NACS vice president of strategic initiatives at NACS. He can be reached at jlenard@convenience.org.