Pejman Yousefzadeh notes that analysts are predicting significant drops in gas prices over the next few months as supplies increase and consumption grows at a rate that is slower than expected.
Gasoline tends to be an inelastic commodity, but a year of high prices do have an effect on people’s willingness and ability to reduce fuel usage. With the airlines being socked with even more restrictive security requirements, their fuel usage is down as well as more flights are cancelled due to security and fewer passengers. The end of summer means less driving and an end to some federal regulations demanding more expensive fuel blends.
Politically, there seems to be some correlation between gas prices and Presidential approval. That’s understandable, as gasoline prices are the most singularly visible sign of he economy’s overall health, and have a rather significant effect on the pocketbooks of American voters. A decrease in gas prices may ease some pressure on the GOP majority which is taking some of the blame for the increase in prices.
Will this be enough to have a significant effect on the election? It’s quite possible, although midterm elections tend to be more about local issues than national ones. However, the GOP needs all the help it can get, and if gas prices are closer to $2 than $3, voters will be less inclined to throw out incumbent politicians than they otherwise might be.
Assuming prices decline by 15% or more and stay that way until November, it’s certainly possible that it could benefit Republicans if it suppresses the “wrong track” numbers. It’s kind of sad, however, that the best hope Republicans have for saving their majority is to hope for a 25-cent-per-gallon reduction of record-high gas prices.
Mark, given the Dems best hope was to run on a failing economy who is better for the country. The ones that work for the better of the country or those that hope it tanks so they can resume the leadership.
On prices in the western suburbs of minneapolis gas is was 2.65 this morning down from around 3.10 a couple weeks ago. A nice 15% drop, looks like a GOP sweep.
Interesting side note, same station has E-85 at 2.79
Dave
Dave, today is August 31. The election is November 7. Don’t you think you might be counting your chickens before they hatch? And remind me again, what time of year is it that residents of the “western suburbs of Minneapolis” start replenishing their home-heating fuel supplies?
And there’s no guarantee that even a 50% decline in gas prices will save the GOP from itself. I was agreeing with Jay’s premise that a gas price decline COULD ease some voter disgruntlement, but it’s far from a sure thing.
That’s what I’ve seen in the southern suburbs too – the price of gas started around $2.85, then $2.77, and now it’s in the low $2.60 range.
Hopefully it will keep going down, not only for the GOP’s political sakes, but for the sake of my rather diminished pocketbook.
It’s $2.34 in central Iowa….cheapest gas in the country they say.
My favorite part is watching you crazy neocons be apologists for the poor defenseless oil conglomorates.