Spring and summer gas price hikes are no novelty, but this year is as bad, or worse than, most years. Specifically, oil prices are jumping to reflect turmoil in the Middle East. This is very good for oil companies' bottom lines: BP, for one, made $5.48 billion dollars this quarter in part due to increased margins on oil. However, gas price spikes have hurt average Americans. At $3.88/gallon, regular unleaded gas is up more than $1.00 per gallon nationally since last April according to the AAA, and it is approaching record prices from the summer of 2008 ($4.11 for regular unleaded).
How much does this hurt Americans' pocketbooks? The average American drives more than 13,000 miles per year, in a car or truck that gets them 22.6 or 18.1 miles per gallon, according to the US government. This means the average American driver is consuming something on the order of 600-700 gallons of gas per year-in fact, the US consumed more than 138 billion gallons of gasoline in 2010, according to the Energy Information Administration, or about 450 gallons per person (including children and other non-drivers). So, $1 higher gas prices are costing the average American driver about $50-$60 per month, or $600-$700 per year on top of the more than $2000 per year they were already spending.
Survey data backs up the economic facts and figures: 71% of Americans told the Washington Post that they are feeling the financial strain from recent price increases, and 43% said the increases have been a serious hardship. (To back up evidence that spring and summer gas hikes are a regular occurrence, we would note in the above link that the Washington Post has asked the same question about rising gas prices in the spring or summer of 9 of the 12 years since 2000-they only missed 2003 and the past two years during the economic downturn). Responses have ranged from a low of 36% saying gas price hikes have caused them a hardship (May 2000) to a high of 77% (June 2008), and the current result is on the high end of Americans feeling the pinch.
The public is taking out its frustration over high prices on Obama, as even he suggested. According to Pollster.com, his job approval has dipped in the last couple months. We can't definitively link this drop to the recent jump in gas prices (they may just be coincidental), but Gallup has noted that gas price hikes were linked with voters souring on both Presidents Bush as well as President Carter and President Nixon. The media has often linked gas prices and presidential approval before, too: a Google search for "president gas prices poll" reveals articles linking the two phenomena together not only this year but in 2005 and 2006 for President Bush.
Voters tend to think that the President can do a lot about gas prices. Angus Reid found in 2006 and 2008 that more than 62% and 65% of voters respectively thought the president could do a lot about gas prices, compared to 29% and 30% who thought it was beyond his control. Gallup also found solid majorities in 2001, 2006, and 2008 that said President Bush was not doing enough to solve the country's energy problems-certainly bigger than just gas prices, but the best public-polling proxy we have for them-and Gallup found in late March that 65% of voters thought President Obama was not doing enough to solve the country's energy problems either.
As far as remedies, voters strongly back Obama's effort to end oil company tax breaks (he proposes rolling back $4 billion in tax breaks this year). Seventy four percent of voters say that would be an acceptable way to fix the deficit, while 22% say it would be an unacceptable way to do so. Other actions voters support to with respect to energy include, according to Pew:
- Increasing federal funding for research on wind, solar, and hydrogen technology (74% favor / 21% oppose)
- Spending more on subway, rail, and bus systems (61% favor / 31% oppose)
- Providing incentives for those who buy hybrid or electric vehicles (58% favor / 35% oppose)
- Allowing more offshore drilling (57% favor / 37% oppose)
