It's June 26th, Summer has started. The average price of gas nationally is now at $4.94 a gallon and likely will get a bit lower now that the largest U.S. refineries and the Biden administration have an ongoing dialogue after the President called them out.
Where I live on Long Island in Suffolk County in the state of New York, the high is $4.89 per gallon, and the low for a brand name gas such as Exxon and Mobil is $4.79. The majority of the stations are at $4.89. In Nassau County on Long Island, it's an easy 5-10 cents a gallon higher than Suffolk County prices
On June 1st New York State joined Maryland, Georgia, and Connecticut and suspended the state's sales tax thru December 31st, 2022. That 16-cents a gallon reduction lasted a mere two days. That was a tease. This is frustrating! Many of us are asking ourselves what the hell is going on.
Though I rarely use off-brand gas, I'm tempted now since the USA1 station next to BP I usually go to is 10 cents a gallon less. Though I was a marketing manager for 20 years, and understand the importance of branding, my brand loyalty now is being tested since I'm struggling.
With inflation in the U.S. in May averaging 8.6%, my marketing way of thinking means less. It's now about spending less. If I make the switch to using off-brand gas, I will miss those highly advertised additives that apparently make a difference in performance and fuel mileage. Or is that a marketing myth?
It could be worse if I lived in California where the average price is $6.43 per gallon according to AAA. In New York, it's $4.94 per gallon on average.
On June 22nd, President Biden proposed a Federal Tax Holiday on gas. That would save Americans 18.4 cents a gallon and 24.4 cents on diesel fuel. It must get Congress' approval which is likely since mid-term elections are on the horizon.
On June 14th President Biden wrote a letter to the major U.S. oil companies asking them to produce more and told them 'well above refinery profit margins are 'not acceptable.'
The American Petroleum Institute and ExxonMobil responded promptly to the President's letter. They informed him in writing and gave him 10 meaningful policy actions his administration can take to alleviate high gas prices all while strengthening national security. Among the 10 ways were; approving critical energy infrastructure, increasing access to capital, and holding energy lease sales.
The good thing about the old-school letter writing is more than before, there's now a dialogue going on between the administration and the American refineries. They need to work together and help one another to hopefully lower fuel prices in the U.S.
In addition, President Biden will soon travel to the Middle East to discuss with world leaders getting oil from the region. Of course, Saudi Arabia is the prime purchasing target. Will he succeed and strike a deal that will ultimately help lower gas prices prior to the all-important November mid-term elections?
No doubt, Inflation is still a major real concern in the U.S. so much so that Federal Reserve recently raised interest rates by 0.75%. The largest increase since 1994.
The President and the Democrats were up to recently, playing the blame game. That strategy is not working in the polls. It's clearly time to take action and come up with a well-thought-out strategy to deal with inflation, specifically lowering fuel prices
If there are no noticeable results soon with regards to inflation, especially lowering fuel prices, Democrats will have a hard time holding on to the House and Senate.
Simple economics and logic tell us that higher fuel prices for gas and especially diesel fuel are a big part of what is fueling inflation. It's not just Putin's price hike. It's this current administration pushing behind the scenes for green energy.
How many people you know can afford an electric car? What do you do with the gas-fueled car you're currently financing? Tell me, Mr. President, and keep it real.
I understand the importance of becoming energy independent and saving the planet. However, those holding offices have to realize we have to deal with now and what we can afford before you push prices so high it fuels a recession, and then what?
And again, with mid-term elections coming up in November, Democrats sure don't want to lose control of the Senate and House. Let's hope in the interim, Congress passes the proposed Federal Tax gas holiday.
jameswritesbest (author) on August 14, 2020:
I do appreciate you taking the time to read my article and also for your most informative and detailed response. Be well & stay safe
CHRIS57 from Northern Germany on August 14, 2020:
You wrapped up the facts very clearly.
Looking at the mess from the outside, let me do some remarks on the US as a whole and the state of New York in particular.
It looks like the state of New York actually followed moreless the same restriction, distancing and lockdown measures that European countries have enacted. The result: Bending the curve, reducing the number of active cases. The relief is obvious. Daily deaths are small compared to Texas or Florida.
When NY peaked in daily new cases (somwhere around April 8th), the state had recorded 9.000 deaths. Today it is 32.000 deaths.
So even if you peak in new cases, the aftermath is horrible (3,5 times).
This is well within the range of what other countries on our planet registered, that had peaked and brought down fatalities.
You can do your own math and do this for the whole US. It will be a bit more complicated, because you have to subtract the states which are static (like NY) and do the multiplying.
My quick pick would be: US peaked on 20th of July. Death count 145.000. The states (today static) to be subtracted probably peaked combined beginning of May. (then 70.000 deaths).
My quick and dirty maths: 145.000 - 70.000 = 75.000.
Apply the multiplier 3,5 = 75.000 x 3,5 = 262.500
Add the already static states again: 262.500 + 70.000 = 332.500
Within a one year period after Covid19 outbreak the US will be very lucky if numbers are kept below 300.000.
Imho vaccination programs will not help enough. Here in Germany the early infected and recovered Covid-19 patients already lost their immunity (antibodies). Happened within 3 months. Hopefully vaccines do better than the virus itself did in creating immunity...