In the wake of the harshest inflation wave in recent years, falling gasoline prices in the U.S. are giving rise to hopes of an inflation slowdown. This comes at a crucial time as President Joe Biden is working to assure voters of his economic acumen.
What Happened: As reported by the Financial Times, the mean price of a gallon of regular gasoline is expected to fall under $3 soon, a noticeable decline from the summer 2022’s record-breaking highs above $5/g.
This decrease in petrol prices is being welcomed by drivers, with one Uber driver reporting that his fuel costs have halved.
Analysts point out that petrol prices significantly influence the public’s perception of the economy. Even though petrol makes up just over 3% of the Consumer Price Index (CPI) basket, economists assert that gas prices, together with food, are key in shaping expectations of future price shifts.
See Also: Best Inflation Stocks Right Now
Several critics, including Donald Trump and other Republican adversaries, have previously attributed the hike in gas prices to Biden’s climate agenda and policies focusing on improving fuel efficiency in vehicles.
Yet, a recent FT-Michigan Ross poll showed that the majority of respondents, 22%, held oil and gas companies responsible for the price hikes.
Why It Matters: The decrease in gas prices is anticipated to positively impact the U.S. economy, especially in light of the forthcoming 2024 presidential election.
It’s important to note that despite the recent decline, petrol prices remain higher than they were before Biden’s presidency. However, the deflation in petrol prices is seen as a positive development amid the slowing inflation of other commodities.
In a rally in Youngstown, Ohio, last year, Trump had accused Biden of intentionally keeping petrol prices low ahead of the 2022 midterm elections, exploiting the strategic petroleum reserve to suppress prices.
Photo via Shutterstock
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