Is Biden to blame for soaring Georgia gas prices? Here’s what you should know.
Americans are paying more at the pump as the conflict between Russia and Ukraine escalates and oil markets react to demand.
The national average price for a gallon of gas – $4.31 – has reached its highest point ever, shattering a record that lasted nearly 14 years, according to AAA.
The average price for a gallon of gas in Georgia is $4.13, a 92-cent increase from a month ago, data from GasBuddy show.
While residents in Columbus and Muscogee County have some of the lowest gas in the state, people in Atlanta and Middle Georgia — including those who live in Bibb, Houston and Peach counties — are spending more at the pumps.
Many are blaming President Biden for the spike, citing the closure of Keystone XL Pipeline on his first day in office as the main reason.
Though policies and legislation can affect the price of gas, there are some other factors that contribute to fuel costs. Here’s how much control the president has over gas prices and what affects them.
How much control does the president have over gas prices?
The president has “very little control” over the price of gas, according to Jeff Lenard, the vice president of strategic initiatives at the National Association of Convenience Stores.
“Gas prices are largely dictated by oil prices and oil prices are dependent upon supply and demand,” Lenard wrote. “Presidential control is not as simple as what those posts suggest on social media.”
Every president since 2000 has left office with gas prices higher than when they took office, Lenard pointed out, adding that the drop in fuel consumption related to the pandemic led to a small spike in gas prices during President Trump’s last week in office compared to his first.
What are the main factors that impact the price of gas?
There are four main factors that affect the price of gas, the U.S. Energy Information Administration says:
The cost of crude oil
Refining costs and profits
Distribution and marketing costs and profits
Taxes by federal and state entities
How is the cost of crude oil determined?
Crude oil prices depend on many factors, and is the main contributor to the increase in gas prices, according to the EIA. Those factors include:
Supply of crude oil: When the overall supply of crude oil decreases, gas prices usually rise. In addition to maintaining a reserve, the U.S. imports crude oil from Canada, the Persian Gulf and several OPEC nations.
Demand for crude oil: The U.S. uses more oil and refined products, like gas, diesel, heating oil and jet fuel, than any other country in the world. Increasing demand for oil products leads to higher prices. The country’s demand increased when people returned to work after the pandemic and started planning vacations as mask restrictions lessened.
Distribution network interruptions: Interruptions like natural disasters, pandemics or political instability can cause gas prices to rise. The country has not reached the level of distribution it maintained before the pandemic.
Value of the U.S. dollar: Oil is traded on the world market in U.S. dollars. When the value of the dollar drops, producers earn less and respond by raising prices.
How do taxes affect the price of gas?
The federal tax on gas is 18.40 cents per gallon, which includes an excise tax of 18.30 cents and Leaking Underground Storage Tank fee of 0.1 cents. Sales taxes and taxes applied by local governments can have a significant impact on the price of gas in some areas.
How do refining costs affect the price of gas?
In accordance with the Clean Air Act, refiners are required to switch to summer blend formulas for many urban markets around May 1 each year. These blends usually contain ethanol and are more expensive to make, which can cause gas prices to rise.
How do distribution costs affect the price of gas?
Gas prices can fluctuate based on wages and salaries, benefits, equipment, rent, insurance and other fees individual dealers have to pay. Retail stations that are in close proximity to each other can have different traffic patterns, rent and sources of supply that affect their prices.
Will Kemp’s tax decision help?
Relief may come soon for Georgia residents in the form of a tax savings.
Gov. Brian Kemp plans to request to temporarily suspend the state’s tax on fuel sales. The gasoline excise rate, set in January, is about 29 cents, according to the state.
“With this latest measure, we are making it even more clear that in Georgia we are going to empower families to keep their money in their own pockets,” Kemp said.
This story was originally published March 11, 2022 at 5:50 AM.
