I’m not trying to be partisan here, but there really is nothing the President can do about gas prices in the near term. There’s actually not all that much he or she could do in the long term. If he or she was the president of Saudi Arabia, then yes, there might be more levers at his or her disposal. But given that our president presides over a landmass that holds 2% of global reserves, there’s nothing he can do to alter the supply constraint.
What’s that? He could release oil from the Strategic Reserve?
That’s actually supposed to be reserved for emergencies, of which a gas price spike in an election year doesn’t qualify. But more to the point, the analysis I’ve seen suggests pennies on the gallon, not dollars (past releases tend to quickly lower the price of oil by a few bucks/barrel but not all of that reaches the pump). With summer driving season coming (which will put further upward pressure on prices—a seasonal effect), it’s unlikely anyone would notice. And even that doesn’t work if we don’t coordinate with other suppliers; OPEC could easily cancel the impact of our release if they wanted to.
What’s that? Build more pipelines?
That’s actually a decent point because there do appear to be “logistical” issues in play in the current spike, meaning oil that’s having trouble getting from where it is in America to where it needs to be refined. But there’s no way that solution will help with the current price spike and it’s also not clear why that’s a presidential issue.
That is, the Keystone pipeline came under presidential review because it crossed an international border (with Canada). That’s not the case for pipelines within the lower 48. Sure, there are safety and enviro regs, but nothing new there. I find it…um…peculiar when some of my friends with whom I debate this stuff on CNBC call for a gov’t solution to an issue of the oil companies’ infrastructure. And of course, those companies are doing quite well right now with the current set of logistics.
There’s only one thing a president and Congress can do to offset this price spike and they’ve already done it: raise people’s after-tax income. The payroll tax holiday that the President pushed for and Congress recently extended should put about $120 billion extra in paychecks this year. Every penny increase at the pump translates into about a $1 billion expense for consumers. Since its most recent low, the national average is up about 55 cents, or about half the aggregate of the payroll cut (annualized) so far.
So, if these rules of thumb are about right, the government is actually in the process of doing about the only thing it can to help people cope with the current price spike. Everything else is just noise.