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As the United States gears up to participate in another presidential election, some may notice that gas prices have steadily come down.
Last week the price of a gallon of unleaded was down roughly 20 cents nationwide over July’s numbers, evidence some Americans might say supports the persistent theory that gas prices dip because of election season. However, energy experts and economists alike have a different view of the subject.
So how much power do our politicians actually wield over gas prices, and what other factors might influence seasonal pricing?
Do gas prices fall during election season?
Contrary to popular belief, presidents have little to no power when it comes to directly affecting or controlling gas and energy prices – even if they gladly take the credit for cheap fuel. Sometimes policies can change the energy market over time, however, it cannot be influenced over night.
“The president, regardless of party, is often seen by the public as somehow responsible for gasoline prices,” said Jim Burkhard, S&P Global Commodity Insights’ vice president and head of research for oil markets, energy and mobility. “The president will be blamed for high gasoline prices or take credit for low prices. The reality is gasoline prices are determined in the global oil market – which no one controls, including the US president.”
Alternatively, experts say that winter-grade gasoline, which gas stations in cold weather states start pumping at the start of fall, is less expensive to produce and in turn can reduce the price of gas and energy as well.
Another factor is demand, which drops after Labor Day weekend and the end of summer, Denton Cinquegrana, Oil Price Information Services (OPIS) Chief Oil Analyst told Money.
Combine cheaper winter-grade gas with the decreased demand for gas in the winter and prices will drop.
According to an S&P Global forecast, retail gas prices aren’t expected to rise during the upcoming election season, but researchers warned that supplies are tight and it is possible that an active hurricane season could disrupt Gulf Coast refinery operations.