Q&A of the Day – How Current Gas Prices Compare to Biden-era Highs
Each day I feature a listener question sent by one of these methods.
Email: brianmudd@iheartmedia.com
Social: @brianmuddradio
iHeartRadio: Use the Talkback feature – the microphone button on our station page in the iHeart app.
Today’s entry: Today’s note was submitted via Talkback: Hey, Brian and Joel, this is Rob from West Palm. I have a question. How much higher are gas prices now compared to the peak high gas prices of Biden? All the liberals are complaining that gas prices are going up, but do they have a leg to stand on? Thanks. Love your show. Listen every morning.
Bottom Line: Appreciate you being there and thank you for the question. Your instincts and memory were/oil correct on this one based on the oil and gas prices we’ve seen to date.
The peak national average retail gas price for regular unleaded fuel during President Biden's administration occurred in June 2022 when we were experiencing peak 40+ year high inflation – what became known as ‘Bidenflation.
According to U.S. Energy Information Administration data, the monthly average nationally reached $5.03 per gallon, with the weekly peak hitting $5.11 per gallon in mid-June. Both prices were and are the all-time national highs for gas prices. The one-two-three punch of the passage of the American Rescue Plan Act – which led to $1.9 billion of artificial debt spending driving up demand, the Russian invasion of Ukraine, and open border policies – which also drove up demand were the factors behind record high prices that summer.
For Florida statewide, the peak average during this period was also in June 2022. AAA data shows the highest recorded state average for regular unleaded at $4.89 per gallon on June 13th, 2022. The EIA’s monthly data for Florida showed Florida averaging $4.72 per gallon during June of 2022.
For Palm Beach County specifically, the all-time high was $5.02 also on June 13th, 2022, on the day of the record high state average. Incidentally, PBC was the first county in Florida to reach $5 per gallon and averaged the highest prices in the state during June of 2022.
With gas prices averaging $3.63 statewide and $3.74 in Palm Beach County, we’re obviously far from experiencing prices that were as high as peak Biden-era prices. In fact, despite having inherited gas averaging $2.39 per gallon when he took office, the average price for gas during President Biden’s four years was $3.45 per gallon – or prices higher than at the end of last week which as much as any illustration highlights the consistently higher prices for gas we experienced during the four years of the Biden administration. Effectively the typical Biden pricing was the equivalent of the Iran war with 20% of the world’s oil supply offline.
The Biden-era comparison is effectual, though at the same time the Biden administration, and Democrats generally, paid a political price for the high energy prices which were a significant part of the 40+ year high inflation. Republicans defeated Democrats in the 2022 midterms – taking control of the House of Representatives in the process and of course President Trump was well positioned to be elected over the incumbent vice president. With that in mind...
The bigger issue at this point is how quickly higher prices come down. Independent of political considerations most Americans can’t stomach a sustained increase in energy prices at the levels we’re seeing this week. In Friday’s government jobs report one of the silver linings to an otherwise ugly report was that through February the average American was starting to see a growing gap between earnings and inflation. Wages have risen by 3.8% year-over-year. With consumer inflation being 2.4% most recently – the average American was earning the most relative to inflation that we’ve seen in over five years. However, all of that will be wiped out and more if these price increases prove to be ‘sticky’, or around long enough that they materially impact the cost of goods – in addition to prices paid at the pump.
Prior to the partial government shutdown of the Department of Homeland Security and the higher energy prices on back of the Iranian war, the Atlanta Federal Reserve’s estimate for economic growth for the first quarter of this year was a strong 3.2% rate. That’s already been cut to 2.1% as we entered this week. That quick move lower is worth watching as higher inflation and negative economic growth would be a brutal combination.
One bit of related news that’s come out recently is that Chevron has announced they’re going to be able to double their Venezuelan oil output by the end of this year. The added production will obviously be helpful regardless of what the near-term future for energy production in the middle east will be. There is a likelihood that if the Iranian war is resolved quickly we could have the lowest oil and gas prices we’ve had since the pandemic. The key will be avoiding the risk of a recession which will rise significantly if energy prices stay as high as what we’re currently seeing.