Biden’s New Economic Scorecard: The Price at the Pump

WASHINGTON — After crossing $5 a gallon in June, the price of gasoline has fallen for more than a month. The Biden administration would like to tell you about it. Again and again.

President Biden and his top officials are conducting a comprehensive campaign to proclaim what is from Friday 38 consecutive days of declines in the AAA average gas price across the country. The president mentioned that streak at a press conference in Saudi Arabia and at the beginning of a speech on abortion rights. Aid workers have repeatedly plotted charts showing the downward trajectory in news briefings and chastised reporters for not spending more time on the topic.

When President Andrés Manuel López Obrador of Mexico jabbed Biden at a meeting in the White House this month and said Americans were crossing the border to buy cheaper gas, the president cut him off.

“It’s been down for 30 days in a row,” Mr Biden said.

Celebrating the daily dips at the pump has become his version of President Donald J. Trump’s rampant bragging rights about stock market gains: a public obsession with a single economic indicator in the hope of generating a winning narrative with consumers and voters.

Embracing this particular trend carries clear risks for Mr. Biden. Gas prices notoriously bounce up and down, and events beyond his control can easily push them back up. If the government’s efforts to impose a global price cap on Russian oil exports don’t go through before the end of the year, White House economists fear that prices could rise higher than they were this spring, until the end of the year. possibly $7 a gallon.

Gasoline cheerleading also poses an ironic challenge to Mr. Biden to face the mounting crisis of a warming planet.

The price hike has, in the short term, forced Americans on a budget to drive less, temporarily reducing the use of fossil fuels that cause global warming. But White House officials say the high prices are not helping Mr Biden’s efforts to move the country into a low-emissions future. Instead, those costs could undermine its longer-term climate goals by bolstering political and public support for more oil drilling and other fossil fuel projects.

High prices for motorists have already soured voters over the president’s handling of the economy and his overall performance in the office. Mr Biden, who often speaks of growing up in a working-class family where “when the gas price went up, you felt it,” has spent months trying to reassure voters that he is doing everything he can to bring those prices down.

As gasoline climbed more than $3 a gallon across the country in the fall as global demand for oil surged amid the rebound in economic activity caused by the pandemic, Mr. Biden the taps of the Strategic Petroleum Reserve. In the spring, when prices hit $4 a gallon, he announced an exemption that would allow summer sales of higher-ethanol gasoline, which costs slightly less for drivers but emits more greenhouse gases over its lifecycle.

Analysts say the president’s efforts have helped keep prices at margins. But no economists even give the government a majority of credit for the sharp drop in global oil prices that began in early June. Instead, they point to market forces: reduced demand for oil from China, which is experiencing a new wave of restrictions due to the coronavirus, and weakening economic activity in Europe and other rich countries. Despite sanctions imposed by the United States and other Western countries, Russian oil has also continued to flow into global markets.

The average national price reported by AAA on Friday was $4.41 per gallon. Last month’s decline is likely to lead to a more favorable inflation rate for July than the 9.1 percent annual increase in the consumer price index reported by the Labor Department for June. Industry analysts and futures markets suggest more relief is likely expected in the coming weeks.

Mr Biden has embraced the change. On Friday, during his first virtual event since testing positive for the coronavirus the day before, the president convened half a dozen economic advisers for a briefing on falling gas prices.

“You can find gas for $3.99 or less at more than 30,000 gas stations, in more than 35 states,” he said. “In some places it’s almost a dollar lower than last month.”

As government officials tried to shift blame for the past year’s soaring oil prices, they were happy to claim at least partial credit for the current decline.

“While there is a lot that goes into determining the global oil and gas price,” Jared Bernstein, a member of the White House Council of Economic Advisers, said in a news conference Monday, “The historic actions President Biden has taken to increase the impact of Putin’s invasion of Ukraine have helped and continue to help increase the global supply of oil and are therefore in the mix of factors driving the price down.”

Republicans say they are surprised the government is celebrating at all when prices remain more than $2 a gallon higher than when Mr. Biden took office. (They don’t mention that he inherited an economy in which global demand for oil was stifled by the coronavirus pandemic.)

It may also seem counterintuitive for the president to encourage lower gasoline costs while pursuing what his aides promise is an ambitious unilateral agenda to reduce greenhouse gas emissions.

“The real answer,” Mr Biden said on Friday, “is to get to a clean energy economy as soon as possible and turn it into something positive.”

Economists largely agree that raising the prices of fossil fuels such as coal and gasoline is one way to ensure that consumers burn less of them and move to lower-emission alternatives such as electric vehicles. The Energy Department reported Wednesday that gas mileage in the United States has fallen nearly 8 percent in the past four weeks compared to the same period a year ago. That continued into the second quarter of the year, which the Energy Information Administration said may have been the result of rising gasoline prices.

But officials in the Biden administration — even economists who previously favored steps to raise taxes on fossil fuels — say the high prices aren’t helping the president’s climate agenda.

The prices reinforce a push from Republicans for more oil and gas drilling on federal lands, which Mr. Biden promised to end as he campaigned for the presidency. Recent price volatility may also cause customers to pause when considering buying a more efficient gas-powered car, or an electric one, as supply chain shortages in the automotive industry make it more difficult for consumers to buy electric cars anyway.

Biden’s assistants have said privately for months that to keep Americans on board with the energy transition, gas prices must fall — certainly below $4 a gallon, and hopefully below $3, which was the national average at the start of last summer.

If prices continue to fall at the pace of the past month, the national average could fall below $3 a gallon in the final weeks of the midterm election campaign. In about 79 days, to be exact.

Not that anyone counts.

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