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$6.00 a Gallon Gas: Joe Biden’s Next Economic Headache?

Gas Prices
A woman rides an electric bike past a gas station as current gasoline prices continues to climb close to record setting territory in Encinitas, California, U.S., May 9, 2022. REUTERS/Mike Blake

Will Gas Prices Surpass $6 This Summer? JPMorgan Says Yes – A JPMorgan research note suggests that gas prices could easily surpass $6 per gallon by August of this year. The warning from the multinational investment bank comes as the national average retail price for a gallon of regular gasoline reached a new record high.

On Wednesday, the national average reached $4.56 per gallon, according to the latest data from the American Automobile Association. It’s an increase of 50 cents over the average price only one month ago and a remarkable $1.52 higher than it was this time last year.

The latest note, published by the bank’s top analysts, said that the recent price surge results from “expectations of strong driving demand.”

Analysts described how refiners usually produce more gasoline just before the summer months when more people take summer road trips. However, gasoline inventories have been dropping recently owing to supply chain problems and market uncertainty. Gasoline inventories are currently at the lowest level since 2019, according to the research note.

On the east coast, gasoline inventories are even lower – reaching levels not seen since 2011.

Gas Prices Reached Record Highs In March

Gas prices were rising before the February 24 invasion of Ukraine, although prices have continued to increase since then.

The average cost of a gallon of gas reached an all-time high in March, and has only gotten worse since. On March 8, the national average price for a gallon of regular gasoline reached $4.17, according to the American Automobile Association. The price smashed the last record high of $4.11 from July 17, 2008.

When adjusted for inflation, the last record high price at the time of the 2008 economic crash was $5.25.

Democrats Bet On Gas Price Gouging Legislation

As prices increase because of short gasoline supplies, House Democrats are betting that new legislation will lower prices by cracking down on alleged price gouging.

In a 217-207 vote, mostly down party lines, the Democrats passed a new bill that gives the Federal Trade Commission the authority to launch investigations into energy companies accused of price gouging.

Progressive Democratic legislators like Senator Elizabeth Warren have repeatedly accused energy companies of “price gouging.” Warren and other Democrats believe that oil and energy companies are purposely charging too high a price for their product, specifically during a time of limited supply.

These claims are contested, however.

The new legislation was sponsored by Reps. Katie Porter and Kim Schrier. The law gives the president the power to block energy companies from increasing prices in an “unconsciously excessive” way.

Republican House Whip Steve Scalise urged his party’s legislators to vote against the bill and accused Democrats are shifting the blame from the Biden administration’s “self-inflicted energy and inflation crisis” to the energy producers, “despite no evidence of price gouging.”

Jack Buckby is a British author, counter-extremism researcher, and journalist based in New York. Reporting on the U.K., Europe, and the U.S., he works to analyze and understand left-wing and right-wing radicalization, and reports on Western governments’ approaches to the pressing issues of today. His books and research papers explore these themes and propose pragmatic solutions to our increasingly polarized society.

Written By

Jack Buckby is a British author, counter-extremism researcher, and journalist based in New York. Reporting on the U.K., Europe, and the U.S., he works to analyze and understand left-wing and right-wing radicalization, and reports on Western governments’ approaches to the pressing issues of today. His books and research papers explore these themes and propose pragmatic solutions to our increasingly polarized society.

1 Comment

1 Comment

  1. GhostTomahawk

    May 20, 2022 at 3:13 pm

    Maybe we should be looking at each state and their regulations and taxes before we peek at companies.

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