After multiple years that included unexpected but long-term events such as the COVID-19 pandemic and the Russian invasion of Ukraine, the United States is finally seeing a return to “normal” gas prices, according to GasBuddy.
According to the latest Tracking Convenience Report from GasBuddy and PDI Technologies, gas prices began to stabilize into more traditional and predictable patterns in 2023—and that trend has continued in 2024.
As much as the occupant of the White House is blamed or lauded for gas prices, the president has surprisingly little influence, based on a historical understanding of gas prices, according to GasBuddy.
While the president can control certain factors such as increasing domestic energy output, changing fuel import and export guidance or adjusting policies on how to manage the nation’s oil reserves. Over an extended period, macro-level policies can affect gas prices. In the short term, however, presidential actions have a limited effect on current gas prices.
The chart below shows the national average price of gasoline by year and presidency.
Myths and Realities
Here are four myths about fuel prices that GasBuddy has attempted to dispel.
Myth: The U.S. president controls gas prices.
Reality: Presidents and their administrations typically have very little short-term impact on gas prices. Policies at a state level have more impact than the Federal level.
Myth: Gas prices are higher in summer because more people are driving.
Reality: The gas formula mandated to reduce smog in warmer summer months is more expensive to produce—leading to higher seasonal pricing.
Myth: Gas prices are higher because of the reliance on imported oil.
Reality: The United States has been the world’s leading oil producer since 2018 and is now a net-exporter of oil.
Myth: Gas prices have been historically much higher since 2008.
Reality: In terms of today’s dollars, gas prices have remained relatively flat since 2008. As of June, the inflation-adjusted price is about 35 cents below the 10-year June average.
What Influences Fuel Prices?
In general, gas prices are influenced by crude oil prices, refining process costs, distribution expenses, station operation charges and a variety of taxes, according to GasBuddy.
Crude oil prices are the biggest factor. As oil prices rise, gas gets more expensive. As oil prices fall, gas gets cheaper. When global demand is high or supply tightens, the price per barrel rises.
After oil is extracted and traded on energy markets, it needs to be refined into gas. Operational expenses, equipment upkeep and transportation all factor into the price consumers pay at the pump.
Distribution, logistics and marketing also add to retail fuel prices. Lastly, fuel taxes, credit card transaction fees, the costs of running gas stations, branding royalties and regional environmental fees all contribute to the gas prices that consumers see.
Inflation and Gas Prices
Although there’s currently a lot of discussion about inflation, from a historical context, gas prices haven’t risen dramatically since 2008 in terms of today’s dollars. Going back a decade, the average price of gas to start summer has averaged an inflation-adjusted $3.99 per gallon, according to GasBuddy.
Current average prices are below that, so while the price may still feel above average, it’s taking the average American less time working to buy a gallon of gas (gas prices peaked in 2008).
Since that time, various changes such as OPEC production levels, Russia’s invasion of Ukraine and the post-COVID US economy reopening led to a “super surge” in gas prices; however, that surge in pricing has dissipated in 2023 and 2024.
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