• Feb 21, 2012
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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    • 1 Second Ago
      • 2 Years Ago
      As good as they are at it, it will be difficult for the politicians to give the truth a greater beating than this article did. The United States is either the second or the third largest exporter of oil in the world; led only by the United Arab Emirates that I know of for sure. Very little oil is imported into the United States from the middle east, and that which is, is made into plastics and synthetic rubber for tires. Most of the fuel for motor vehicles is made from oil produced in Canada. Oil produced in the United States is largely shipped to foreign countries, particularly to asian countries. This is wholly due to the fact that our elected officials of both parties (which is really one party anyway) are really just puppets for the international bankers and their corporate associates that have become, behind the scenes, the real government of this country. These families own and/or control the Federal Reserve Bank, all of the TV networks and major newspapers and radio networks, the big banks of this country, most of the major corporations, and the controlling interest in the international oil companies. In short they control the money, and now us, whether we like it or not.
      • 2 Years Ago
      In the state of the Union address, I recall that it was said that the USA has more OIL than all of the middle east and we are importing little from there. NOW, why does two "in Maintenance" refineries in the North East raise gas prices in the West?? Two completely different sources.! This is pure price fixing by the Obama Oil companies..
      • 2 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.
      • 2 Years Ago
      I usually do not respond to articles - but I do remember everyone claiming that Bush was the reason why the gas prices were high - everyone was screaming this from the mountaintops!!
      • 2 Years Ago
      All BULLSH.. the only reason gas is going up is GREED by the big oil companys anmd the bloodsucking speculaters. And both REB/ and DEM can't do anything about is because they are bought and paid for.
      • 2 Years Ago
      Wow. Talk about an overactive imagination! The difference between the two parties is that Republicans already knew that the President( any )doesn't have control over the prices directly. The only thing they can pin Mr. Obama on is the fact that we don't have an energy policy that allows us to be prepared for this type of spike. But neither has any other President. I haven't heard anyone say Obama is to blame and I doubt many Republicans will. But we're all getting tattooed regardless of affiliation. It is ironic that the press and the left blistered George Bush when gas spiked before. It was his oil connnecton to blame.....yeah, whatever.
      • 2 Years Ago
      And oil companies will continue right along making RECORD profits.
      • 2 Years Ago
      Really, analysts believe that the refinery shutdowns have more impact than $100+ crude oil? What a weak attempt to indemify the Obama Administration. They might as well be trying to sell ocean front land in AZ.
      • 2 Years Ago
      Of all the issues politicians are babbling about right now, this is the one that will sink the whole frigging ship. Oil is the life blood of our economy. The message has been sent this winter by the oil companies aided by corrupt and/or passive politicians that it doesn't matter what we do as consumers they are going to stick it to us to maintain their profits. This has been going on since the energy crisis of the 1970s. All we heard was conserve, conserve, conserve. So people conserve, the weather cooperates and we still get hammered. You can almost hear them saying, "Let them eat cake."
      • 2 Years Ago
      America wants to pay high gas prices. Thats why they keep getting higher. Every citizen should storm the whitehouse fence and demand for prices to drop. There should be riot like demostrations that shut the entire country down overnight until the prices revert to 2005 prices. But we dont because we are too busy with other things like buying new Ipads. I say raise the price to $20 a gallon. If we are going to take it in the butt- might as well be a good one right?
      • 2 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.
      • 2 Years Ago
      Here we go again. Republicians blaming Democrats and Democrats blaming Republicians. They will never get together and solve the countries problems. If thye worked partly together this country would be great AGAIN. Still nobody talks about the Alaskian pipe line that pumps out 1 million gallons a day and it all goes to Japan. Yes its expensive to ship to the east coast so why dose'nt the refineries build a new station to refine the oil in in the NW. The refineries have enough money to build. The oil industry is the problem. Now they say the oil speculators are raining prices because of Syria. Just another way to raise the cost of fuel. How many of you remember the fuel shortage of 1973 into 1974. Long line of 4-5 hour waits. After the prices went way up an investigation was done and it was found out that the refineries caused the problem by holding back the supplies. Their were barges loaded with oil with no place to unload, and they just sat their of shore. The refineries had so much fuel they started pumping gasoline in underground tanks where gas stations had closed. The government tels us to beware of scams. The oil price raising is the biggest scam of all.
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