WEBVTT - Can the President Control Gasoline Prices?

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<v Speaker 1>Welcome to brain Stuff, a production of I Heart Radio,

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<v Speaker 1>Hey brain Stuff Lauren Vogelbaum. Here, the critics of any

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<v Speaker 1>US president are quick to blame the commander in chief

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<v Speaker 1>for things that are totally beyond their control. Of course,

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<v Speaker 1>presidents and their supporters are equally quick to take credit

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<v Speaker 1>for things that are beyond their control, and the price

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<v Speaker 1>of gasoline is a perfect example. In fact, one Pew

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<v Speaker 1>research study showed that Democrats believe the president can control

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<v Speaker 1>gas prices when a Republican president is in the White House,

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<v Speaker 1>but not when a Democrat is. Republicans also believed that

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<v Speaker 1>the president controlled gas prices when a Democrat occupied the

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<v Speaker 1>White House, but not when a Republican did. The truth

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<v Speaker 1>is that no president, be they Democrat or Republican, friend

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<v Speaker 1>of big oil, or supporter of alternative fuels, can do

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<v Speaker 1>much of anything to affect these short term at price

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<v Speaker 1>of oil and therefore of gasoline. The overriding factor that

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<v Speaker 1>determines the price of oil from day to day is

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<v Speaker 1>the market principle of supply and demand. It comes down

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<v Speaker 1>to simple economics. When demand is greater than supply, prices rise.

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<v Speaker 1>The actual price of a barrel of oil is constantly changing.

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<v Speaker 1>Since oil is a commodity that's traded on the futures market,

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<v Speaker 1>buying and selling oil futures is called speculating because you're

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<v Speaker 1>making trades based on expectations of future supply and demand,

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<v Speaker 1>and for a while demand with skyrocketing. After the Great

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<v Speaker 1>Recession ended, demand steadily increased as the global economy recovered.

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<v Speaker 1>To match that demand, US oil production rose dramatically, from

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<v Speaker 1>around five thousand barrels a day in two thousand nine

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<v Speaker 1>to a record high of thirteen thousand, one hundred barrels

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<v Speaker 1>a day in early due in large part to the

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<v Speaker 1>drilling technology called hydraulic fracturing or fracking. American oil producers

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<v Speaker 1>were able to keep pace with demand and keep gasoline

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<v Speaker 1>prices stable, but on March six, crude oil went as

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<v Speaker 1>high as a hundred and thirty dollars and fifty cents

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<v Speaker 1>of barrel overnight, the highest price since two thousand and eight,

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<v Speaker 1>just before the Great Recession caused a huge drop in demand.

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<v Speaker 1>Prices then settled at around a hundred and twenty dollars

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<v Speaker 1>of barrel, which is still high historically. Reports indicated that

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<v Speaker 1>the spike was due to supply disruptions resulting from Russia's

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<v Speaker 1>invasion of Ukraine combined with the market forecasting the possibility

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<v Speaker 1>of a US ban on Russian oil, which did come

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<v Speaker 1>to pass. So if gasoline prices are largely at the

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<v Speaker 1>mercy of global fluctuations in supply and demand, what can

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<v Speaker 1>a president actually do, if anything, to influence gas prices.

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<v Speaker 1>What about increasing the oil supply? But can't the president

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<v Speaker 1>boost US production? It's true that aggressive increases in US

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<v Speaker 1>oil production would bring the global supply for oil closer

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<v Speaker 1>to the demand. However, the US is such a small

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<v Speaker 1>player on the international oil scene America controls only four

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<v Speaker 1>percent of the world's oil reserves that even if the

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<v Speaker 1>US doubled its current production capacity, it still wouldn't make

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<v Speaker 1>much of a dent. It would also take a number

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<v Speaker 1>of years to assemble the drilling rigs, pipelines, and crew

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<v Speaker 1>to make that kind of production increase, meaning oil prices

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<v Speaker 1>would be unaffected in the short term. The only way

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<v Speaker 1>the president can quickly boost the oil supply to lower

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<v Speaker 1>gasoline prices is by tapping the Strategic Petroleum Reserve, an

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<v Speaker 1>emergency stockpile of more than seven hundred million barrels of

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<v Speaker 1>crude oil stored along the US Gulf Coast, it's happened before.

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<v Speaker 1>In June, President Barack Obama released thirty million barrels of

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<v Speaker 1>oil from the emergency reserves in response to the crises

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<v Speaker 1>in Libya and Yemen. The President George Bush also tapped

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<v Speaker 1>the reserves, and the aftermath of Hurricane Katrina, temporarily lowering

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<v Speaker 1>gas prices tend to fifteent and President Joe Biden has

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<v Speaker 1>announced plans that will raise the total of reserve oil

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<v Speaker 1>released this year to a hundred and eighty million barrels.

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<v Speaker 1>Over four hundred million barrels are still in reserve. One

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<v Speaker 1>other way the president can influence gas prices is by

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<v Speaker 1>changing the gasoline tax, which is currently at eighteen point

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<v Speaker 1>four san sa galen, but this has been unchanged since

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<v Speaker 1>and is not likely to move as there are a

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<v Speaker 1>lot of political implications involved with raising or lowering it.

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<v Speaker 1>Abiding called for Congress to enact day federal gasolene tax

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<v Speaker 1>holiday over the summer of two to ease prices, but

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<v Speaker 1>nothing came of it. As we've discussed in previous episodes,

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<v Speaker 1>states can change their own gas taxes a little more easily,

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<v Speaker 1>and some have done so during this election season, possibly

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<v Speaker 1>to curry favor with voters. Today's episode is based on

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<v Speaker 1>the article can the President Control gas Prices? On how

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<v Speaker 1>stuff works dot Com, written by Dave Rouse. Brainstuff is

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<v Speaker 1>production of I Heart Radio in partnership with how stuff

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<v Speaker 1>works dot Com, and it's produced by Tyler Klang. Four

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