While Romney promises his base-rubes that he’s going to lower gas prices if he’s elected…
LAST NIGHT: (via: USAToday)
Claim: Romney said a gallon of gasoline in Nassau County, N.Y., was $1.86 when Obama took office. It’s now “4 bucks a gallon.” He also said the cost of electricity is up.
Facts: Gas prices were going through a period of exceptional volatility when Obama took office — largely because, as Obama noted, gas prices plummeted as the recession took hold and people drove less. The day before Obama was sworn in, the national average for a gallon of regular gas was $1.83, according to the U.S. Energy Information Administration (EIA). As of Monday, it was $3.71.
But gas prices are still 34 cents below their all-time high during the Bush administration. In the summer of 2008, the national average hit $4.05 a gallon.
MORE FACTS:
Businessweek: “You’d think a man as business savvy as Romney would be more attuned to the fact that markets, not politicians, determine the price of crude oil and therefore gasoline. [...] The U.S. is currently producing 6.6 million barrels of crude oil daily, compared with 5 million when Obama took office. The last time the U.S. was pumping this much oil was in May 1995, when the national average cost of a gallon of regular gasoline was $1.17. Today, it’s $3.81. The difference is the price of a barrel of oil. In 1995, a barrel of oil was $19. Today, it is around $92. [...] High gasoline prices aren’t a production problem; they’re a logistics problem. The U.S. is currently undergoing the biggest recalibration of its pipeline infrastructure since many of those pipes were laid 50 years ago. But here’s the thing: Building more pipes won’t necessarily bring down the price of gasoline. If anything, it’ll make it more expensive on the whole. Once all that cheap domestic crude starts to find more markets, its price will rise, not fall. A commodity that has access to more markets, and thus more demand, will eventually become more valuable.”
Steve Benen: “And how did gas prices get so low in late 2008 and early 2009? Because there was a global economic catastrophe — gas was cheap because the economy had fallen off a cliff. As the economy improved, demand went up, and the price of gas started climbing. It’s Economics 101. As Matt Yglesias explained a while back,
“It turns out that driving to work, ferrying stuff from the warehouse to the store, hauling containers across the Pacific Ocean, and flying around to meetings all takes oil. If you manage to orchestrate a situation in which millions of people lose their jobs, retail sales plummet, stores close, and economic activity generally grinds to a halt, this frees up a lot of extra oil.”
Demand went down, supply went up, so gas prices went down. Then the economy improved, demand went up, supply went down, so gas prices went up. It doesn’t mean we’re watching a flawed energy policy fail; it means there’s a global market that’s affected by recessions and recoveries.”
HISTORY:
“…under George W. Bush, the price of gasoline increased from $1.60 per gallon when he took office in January 2001 to $4.40 per gallon in July 2008, a jump of 275 percent.” – GOP Deceptions About Gas Prices
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