Old North News

The Biden administration has blamed Russian President Vladimir Putin and Russia's war with Ukraine for American price hikes, especially the price of gasoline.

However, now that pump prices are declining in North Carolina and across the nation, President Joe Biden wants credit for it. Commentary from the Institute for Energy Research (IER) confirms gas price reductions are the result of inflation and demand destruction, as gasoline consumption has drastically dropped since many Americans cannot afford it.

Lower gas prices are primarily driven by demand destruction, which refers to "persistent high prices or tight supplies that eventually lead to a drop in demand," according to the IER. During the week of July 8, national gasoline consumption dropped by 9.7% to 8.73 million barrels per day, according to data from the Energy Information Administration (EIA). Aside from the pandemic lockdown in 2020, this marks the lowest seasonal demand in 21 years and the steepest decline in 2022.

Many people can no longer afford to pay for gas and the spike in gasoline prices made Americans go on a "buyers’ strike" this summer, according to the IER.

"While demand for gasoline has rebounded a bit, it remains below where it was two years ago as historically high prices keep more drivers off the road than COVID lockdowns did in the summer of 2020," IER stated in a July 28 article.

Due to decreased consumption, the West Texas Intermediate oil price dropped below $100 per barrel, according to IER. The $8.50 per barrel premium of Brent oil to U.S. West Texas Intermediate is the widest gap since mid-2019. Reduced gasoline consumption is lowering margins for refineries, causing them to switch production to more profitable fuels to protect themselves against losses.

"Gas prices are declining at one of the fastest rates we have seen in over a decade – we’re not letting up on our work to lower costs even further," Biden said in a tweet July 22.

Biden began blaming the rise in prices, particularly gas prices, on the Russian war with Ukraine since early March. Fox News reports that his administration coined the phrase #PutinPriceHike on Twitter and frequently maintained that rising prices have "nothing to do" with his administration’s policies, telling the American people, “Make no mistake, inflation is largely the fault of Putin."

According to the American Automobile Association (AAA), the current national gas average is $3.99 per gallon. When Biden entered office, the average was $2.33 per gallon. In North Carolina, the state average is $3.74 per gallon, while a month ago it was $4.34 per gallon.