Misleading Messages on Gasoline Prices

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By Saranac Hale Spencer

Posted on October 27, 2020

Pictures of gas station signs advertising the price of fuel have been circulating on social media with politicized claims.

Both Reuters and PolitiFact have already debunked some of the most viral versions.

Now President Donald Trump’s middle son, Eric Trump, has jumped in with a picture of a sign at a popular mid-Atlantic gas station, Wawa, advertising regular gasoline for $1.84 per gallon.

Eric Trump wrote this comment with the picture on Twitter and Facebook: “If Biden gets in, not only will he destroy the Oil & Gas industry (and millions of American jobs and lives), we can all say goodbye to these unbelievably good gas prices. Don’t forget the nearly $5 per gallon we were paying under O’Biden.”

At least one other post makes a similar claim using other gas station signs paired with photos of Trump and Obama.

While it’s common for presidents to be credited when gasoline prices are low and blamed when they are high, presidents don’t actually have much effect on the prices. The policies they set can have some impact, as we’ve written before. But the U.S. Energy Information Administration has explained that more than half of the retail cost of gasoline is determined by the price of crude oil, and that price is driven, largely, by supply and demand.

The issue of supply and demand is why prices at the pump have been low in 2020. Due to the outbreak of the novel coronavirus, global oil demand dropped by 5.6 million barrels per day in the first quarter of the year, compared to the previous year, according to the International Energy Agency.

With a steep decline in road traffic, “[g]asoline was the fuel with the largest absolute decline in demand related to Covid‑19 containment measures,” according to an April report from the IEA.

Similarly, the most recent weekly report from the EIA, the U.S. agency, said, “Efforts to mitigate COVID-19’s spread led to a collapse in global petroleum product demand.” Although global demand has recovered “somewhat,” it said, demand is still lagging what it was in 2019 and “[f]uture demand for petroleum products remains highly uncertain as COVID-19 infection rates are rising in a number of countries.”

The weekly average price for regular gasoline in the U.S. dropped from $2.58 at the beginning of the year to $2.14 in the most recent week, hitting a low of $1.77 in late April, according to data from the EIA.

So, while we don’t know when the picture Eric Trump posted was taken, it could well have been from the time when much of the country was shut down this spring in an effort to slow the spread of the coronavirus and gasoline prices dipped below $2 per gallon.

The average price of regular gasoline during the Trump administration has been higher than that picture suggests, though. We calculated the average retail price of gasoline at $2.49, using EIA data from Trump’s first full week in office through the week ending Oct. 26.

That’s 48 cents per gallon lower than the average retail price for regular gasoline during the Obama administration. The price averaged $2.97 during Obama’s eight years, according to the EIA data. It’s also worth noting that in 2016, Obama’s last full year in office, regular gasoline averaged $2.14 per gallon, the cheapest it had been since 2004.

So, it’s misleading for Eric Trump to write that the price was $5 during that time — as he described it, “under O’Biden,” in an apparent effort to tie former Vice President Joe Biden to the cost of gas.

Gasoline prices did reportedly surpass $5 per gallon at some California filling stations while Obama was president in 2012 — although that was true, too, under Trump in 2019. But weekly statewide averages never topped $5 under Obama or Trump, according to the EIA.

Also, citing California stations as an example of national prices is misleading, since the state typically has higher prices than elsewhere.

The EIA explains on its website, “California gasoline prices are generally higher and more variable than prices in other states because relatively few supply sources offer California’s unique blend of gasoline outside of the state. California’s reformulated gasoline program is more stringent than the federal government’s program. In addition to the higher cost of this cleaner fuel, state taxes on gasoline in California are higher than they are in most states.”

So, average gas prices have been lower while Trump has been in office than while Obama was. But presidents don’t have control over those prices, and the difference isn’t as large as Eric Trump suggested.