Gasoline

Gas Prices Were Lower Last Year Because Last Year Was Really, Really Awful

And Trump is taking full credit.

|

Just in time for Memorial Day weekend, the national average price for a gallon of regular gasoline has risen to over $3, according to the American Automobile Association (AAA). This is up from $1.96 this time last year. As our most recent former president observed, "I'm sorry to say the gasoline prices that you will be confronted with are far higher than they were just a short number of months ago where we had gasoline under $2 a gallon."

Well, yes. But why might gasoline prices have been lower a year ago? Thanks to former President Donald Trump's mishandling of the COVID-19 pandemic, U.S. GDP decreased at an annual rate of 32.9 percent in the second quarter of 2020. In addition, the national unemployment rate in May 2020 stood at 16.3 percent. Americans without jobs and income were less inclined to travel. While the AAA estimated a record 43 million Americans hit the road during Memorial Day weekend in 2019, only 23 million traveled in 2020. Demand for gasoline was impacted by the fact that total vehicle miles traveled in 2020 fell by 13.2 percent, the lowest level in two decades. So yes, Trump is indeed partially responsible for lower gas prices last year.

The Biden administration issued a press statement asserting that Americans "are paying less in real terms for gas than they have on average over the last 15 years—and they're paying about the same as they did in May 2018 and May 2019." In fact, that's about right. According to Energy Information Administration data, the average prices of gasoline were $2.96 and $2.82 in the last weeks of May 2018 and May 2019, respectively.

Of course, there have been both significant jumps and slumps in the price of a gallon of gasoline over the decades.

Still, it is quite remarkable that the annual inflation-adjusted price of gas since 1978 has hovered in a narrow range from a high of $2.438 (1978 and 1979, the second oil shock) to a low of $2.242 (the 2020 COVID-19 pandemic). If Trump really wants to take credit for the pandemic-induced low gas prices we had during Memorial Day weekend in 2020, he's welcome to do so.