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Gas prices are trending upwards again (Diego3336, Flick... Gas prices are trending upwards again (Diego3336, Flickr).
Get ready for a slew of political ads and campaign season stumping by Republicans blaming President Obama for rising gasoline prices that could be at or near $5 per gallon in many parts of the country by peak driving season this summer.

While $5 gas prices are catnip for Republican campaign strategists trying to take over the White House and Senate in November, the factors driving up gas prices have almost nothing to do with decisions and policies made by the Obama White House.

"As we continue to move towards warmer weather, gasoline prices will follow, with prices accelerating higher at a faster pace come late March into April, so if motorists think this is bad, they should really hold on to their chairs," says Patrick Doha, senior petroleum analyst at Gasbuddy.com.

Analysts point to a combination of factors: The shut-down of two major refineries that supplied 20 percent of the gasoline consumed in the Northeast; increased demand for fuel in Northern Europe, which has been experiencing a long spell of frigid temperatures; increased demand from China and other developing economies; and uncertainty about Iran's production, as that country saber-rattles about limiting its output or threatening a disruption of oil shipping in the Straits of Hormuz.

That last issue – driving up speculation on oil – is the only factor the White House could legitimately be expected to impact, say analysts, but that is not even the most significant catalyst driving oil prices.

"Whenever you reduce refinery capacity, you have the increased possibility of price spikes because you have fewer resources to fall back on in the event of a refinery disruption or an emergency," says oil industry analyst Phil Flynn of PFGBest Research.

The national average for gasoline began the year at $3.28 a gallon. The average price for February so far is $3.49 a gallon. That's up from $3.17 a gallon last February, a record at the time. Back in 2007, before the recession hit, the average for February was $2.25 a gallon.
Prices are higher on the East and West Coasts, where gasoline has risen above $3.70 in Connecticut, New York, Washington D.C. and California. This isn't unusual - states on the coasts charge some of the nation's highest gas taxes.

View Gallery: Automakers And Feds Pushing More Hybrids And EVs Despite Cool Consumer Response


More hybrids and fuel thrifty cars on the way

The decreased demand for gasoline in the U.S., which would otherwise drive prices down if not for the global factors, is due to the soft U.S. economy and consumers driving more fuel-efficient vehicles.

When gas prices have spiked, as they have in each of the last four years, new-car buyers snap up hybrids and other more fuel-efficient vehicles. Too, toughening federal fuel economy standards have moved automakers to make their cars, SUV and even pickup trucks more less gas thirsty.

Demand for thriftier vehicles is expected to mount in coming months and drive their sticker prices up as well.

"We see the demand and market for more fuel efficient vehicles as a new normal for the U.S. and we are doing everything we can to push the fuel efficiency of our vehicles even higher," says Ford Motor Co. chief of global marketing Jim Farley. Farley notes that the company is now selling about 50,000 F-Series pickup trucks per month with a V6 EcoBoost engine, rather than than V8 engines. "The demand for that truck has far exceeded our expectations, and really shows that everyone is looking for better fuel economy."

In Los Angeles, the price of regular unleaded already is $4.93 a gallon and premium $5.09 at some gas stations, and the escalating fuel costs are expected to ripple throughout the economy, affecting everything from groceries to airfares.

The Politics of gas prices

Oil around the world is priced differently. Brent crude from the North Sea is a proxy for the foreign oil that's imported by U.S. refineries and turned into gasoline and other fuels. Its price has risen 11 percent so far this year, to around $119 a barrel, because of tensions with Iran, a cold snap in Europe and rising demand from developing nations. West Texas Intermediate, used to price oil produced in the U.S., is up 4 percent to around $103 a barrel. That's 19 percent higher than a year earlier.

A 25-cent jump in gasoline prices, if sustained over a year, would cost the economy about $35 billion. That's only 0.2 percent of the total U.S. economy, but economists say it's a meaningful amount, especially at a time when growth is only so-so. The economy grew 2.8 percent in the fourth quarter, a rate considered modest following a recession.

Republican presidential candidates Rick Santorum, Mitt Romney and Newt Gingrich have moved gas prices to top positions in their campaign stump speeches. Gingrich has made fuel prices a big new theme, launching a Facebook petition drive aimed at $2.50 a gallon gas, while bitterly criticizing the administration at every campaign stop.

"Stop bowing. Start drilling," the Gingrich website proclaims. Drilling for new oil in the U.S., would do nothing for this year's gas prices, and its doubtful that new drilling in 2008 or 2009 would be paying dividends today.

It can't be forgotten that the U.S. took a prolonged pause in opening new drilling contracts in 2009 when the BP oil disaster in the Gulf of Mexico occurred.

While U.S. drivers are seeing weekly gas bills climb through the summer, there will be plenty of finger-pointing over who is to blame. But the truth will probably take as big a beating as consumers' wallets.

The Associated Press contributed to this story.

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  • 492 Comments
      Ricardo
      • 3 Years Ago
      Poor politicians! Hitler was white; Obama is mulatto. And these are the guys who plan to reform education in the USA! Yeah! They are trying to compare USA public school students to those from civilized countries where every student has respect for their teachers: http://www.economist.com/node/21547854 USA public school students have no discipline; stop trying to achieve in the USA and England the unachievable. This is the end for the western culture. Lets bring the Asians to all countries so they can rule the world. That is why you all going to pay $5.00 to $10.00 for gasoline this year just because stupidity rules this nation of stupid voters and followers. You don't have the balls to stand up against the abuse from rich people, Wall Street and our politicians' oil friends. That is why this country will collapse the same way the USSR collapsed. This is why the only doctors you see in America come from Asia, Israel, India and other Arab countries. This is why you are going to pay more and more for food, gas, water and other essential needs you need to stay alive. But this is a country of entertainment, of sports, of plasma tv and cell phones. That is why those big CEO's will charge us more and more and more because this is a third world country rule by these people.
      clansman61
      • 3 Years Ago
      Headline: "What's Really Driving $5 Gasoline Worries" Easy enough to answer in 1 word...GREED!
      bchrist751
      • 3 Years Ago
      You Democrates had no problem blaming Bush when Gas prices were over 4 bucks a gallon.... Remember he was an Oil Man, helping out his rich oil buddies you Demo's yacked and yacked about how this was all G.Bushes fault... Know you have changed your tune... don't blame our guy Obama... It's not his fault we are going to be paying over 5 bucks a gallon..... Yes, IT is Obama fault.... just like it was G. Bush fault!
      wilkesgm
      • 3 Years Ago
      Odd that they do not tie the shutdown of two major refineries to Obama's "no new refineries" platform. He also doesn't like the Canadian pipeline or drilling in the gulf. Oh, one other thing - OPEC is cutting back on production because of one of the periodic gluts that occurs on the oil market. So, rising prices during a glut? Look to government for that kind of Obamanonics.
      • 3 Years Ago
      Like a guy in Europe 70 or so years ago who decided to make the Peoples car the VW. We now have a goverment that has taken over GM and are now trying to foist the Volt on us. They would like to see gas prices go through the roof so people will be forced to buy this electric tin can. Its all part of the twisted vision of reamaking this country. By the way the USA used 0ver 10% less petro product last year. Where did the surplus go?
      ryanonash
      • 3 Years Ago
      I find it funny that people are quick to blame Obama, for something he has no control over. The last time gas went to $5 Bush was in office, Obama was running. What’s funny about that is no one blamed Bush for the gas prices, but were quick to again blame Obama who was not even in office yet. How can the American President control what other nations do? We have gone to war twice over oil, under Bush one and two. (Wars that Obama stopped saving thousands of lives, but that does not matter.) While thousands of our sons and daughters died we did not get any more oil. What’s funny again is no blamed the Bush’s, why is that? Another question: big oil found oil deposits in the Midwest ten years ago, and they have permission to drill why haven’t they? Just like I can’t control the gas and electricity each of you use, the President can’t control what other countries do with their oil. So Obama was right when he said we need to search for alternative sources, because we are being held hostage by Iran. We have to get from under their foot. Here is another tidbit; we export most of oil we produce here. So we want free market and for big oil to do what they want, well the price for that is for them to freely ship the oil they drill here to other countries. But that’s stupid, if you paid attention to what Obama wants you would see that if Americans oil companies want to export our product as they do they should pay higher taxes. But Republicans don’t want that to happen. I wish people would stop watching FOX and listing to all those right wing radio host taking their word for it. Everything I hear from the common person I have heard from them. Don’t believe what they say spend some time and research it yourself. Most of the time they tell half truths or outright lie. Obama has no control over oil, but they will convince you to believe he does.
      • 3 Years Ago
      Obama and the Dems had no problem blaming Bush when gas went to 4.oo the first time? Repubs have no problem blaming Obama....just more of the same.
      narrowspd
      • 3 Years Ago
      Can't wait to hear all the old "Obama blames Bush for oil prices" soundbites during this years election cycle.
      • 3 Years Ago
      What a bunch of hooey, I could barely make it to the end of this article without gagging. I encourage anyone that believes this junk to take a nice drive through North Dakota or Montana sometime. There are oil wells within a half mile of each other IN EVERY DIRECTION pumping 24/7. Just a usual day with oil companies jacking up the prices for any reason out of the blue. If a camel farts upwind in the middle east the price jumps a dollar. This goes well beyond supply and demand when our top export is OIL, its all about the profits. You Obama blind followers need to wake up and realize that he is trying to throw us into a GLOBAL economy. Neat theory, too bad I can drive over the Mexican border and buy gas for under $1 a gallon. WE THE PEOPLE are PAYING to supply the rest of the world! Also, why would you want a corrupt government running ANOTHER corrupt industry? With their help, we would probably be at $10 a gallon. Oh and many of us working people are still waiting for the criminals in the mortgage SCAM to be brought to justice...I bet you a gallon of gas that will never happen.
      agesnow
      • 3 Years Ago
      The culprits are all of us, and more so for even thinking beyond our wildest dreams that our government would actually step in and open our own Oil Fields to help ease the burden on each and every American citizen. No not a cold day in hell will that ever happen - our cuurent government is too emboldened in the Global Market to even lok aside and think. "Wow, what could we do to help our citizens, but no we must first take care of our Global friends (????) " Well, in all this and the push for expanded auto markets into China for one, adn other Third World countries for another, it is not hard to predict what is ultimately going to happen to our fuel costs" and this is not coming from any expert, it is coming fromn a common US citizen down here having to pay out for the so-called experts. So where do we really go from here, huh?
      sooten7422
      • 3 Years Ago
      None of this article is telling truth...The fact is there is no real legitimate reason for Gas prices to be over $2.00 a gallon...Its all a scam...The price is based on BS....Wall Street look outside and flips a coin as to what the price will be today...They just use what ever country is ticked off at the moment to justify the results of that flipped coin...If I were at a gas pump and let the pump drop a drop of gas on the concrete and called Wall Street and told them....Gas would go up 50 Cents the following day....all they need is a reason and it doesn't have to be a good one at that.
      rjhpwh12
      • 3 Years Ago
      Come on Washington, lets keep the economy so screwed up that we will never get back to normal again! My bet is...it's not the price of crude that keeps our gasoline prices up...it's the US taxes, state taxes and the profits certain Americans are allowed to take from the pockets of our citizens!
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