March 19, 2012 08:37 PM UTC

One More Time Class: The President Doesn't Control Gas Prices

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• by: Colorado Pols

From Sunday’s New York Times:

If only the president had the power to give us $2.50-a-gallon gasoline, as Newt Gingrich promised to do if he got to the White House. It is ridiculous to think that a president can.

One can sympathize with consumers feeling the pain of higher gas prices. But the fundamental truth is that those prices are tied to the price of oil, set by world markets. There are peaks and valleys, but their causes – a worldwide recession, an embargo or conflict in the Middle East – are beyond the control of any one country. As the chart below shows, gasoline prices rise and fall in the same pattern throughout the world. Americans historically pay much less at the pump because they pay lower taxes; when the price of a gallon spikes at $3.70 in the United States, it is closer to $8 in, say, Germany.

You may have noticed the online ads all over the place in which President Obama’s campaign points out how oil drilling in the U.S. has been on the rise since he took office. The gas prices myth is obviously a storyline that Obama’s campaign is concerned about as it pertains to his re-election…too bad it is completely fictional.