Monday, November 20, 2006

The midterm election and the price of gas

I updated my gas mileage / gas price spreadsheet to include data collected since the last time I posted on this topic back in April. I was going to include the graphs here, but getting them from the old MS Works Spreadsheet application to something that looks good on my blog is a little more work than I wanted to engage in tonight. For now, you will have to trust my descriptions of the graphs.

The mileage chart does not show any surprises: values ranging from a high of 41.8 mpg on 9/2/06 (fill-up at a Sunoco on the Pennsylvania Turnpike on the way to the Felberpalooza!) to a low of 33.8 mpg on 10/18, with a high "run" in July and August and a general trend that correlates fuel economy to temperature. (Did we have an unusually warm April? I'll have to look that up.)

The price of gas is another story.

One of the urban legends around the price of gas is that the Bush Administration is responsible for manipulating the gas prices to benefit their cronies in the oil industry while at the same time playing on the American public's lack of long-term memory by convincing them that any momentary drop in the price of gasoline is an indication of good times ahead. This has been thoroughly debunked by analysts who have pointed out that any influence one powerful family and one powerful government can exert on the behavior of the industry as a whole is negligible compared to market forces, supply, infrastructure considerations, and the weather.

This didn't slow down people from strongly suggesting that the Bush Administration was responsible for a decline in gas prices in the weeks leading up to the midterm election. And this myth was only reinforced when Bush, during one of the many, many political support trips he took during those crucial pre-election weeks, cited dropping gas prices as a reason why voters should maintain the political status quo. Vote for the Democrats and gas prices will go up!

So what does this look like graphically?

From the end of April to the end of June we see a downward tend in prices, from $2.939/gallon on 4/27 to $2.679/gallon on 6/23. Prices then climb to a high (for this data set) of $2.999/gallon on 8/3 and begin a long, downward slide, interrupted only by the anomalous price of gas at the Pennsylvania Turnpike Sunoco where I stopped going to and coming back from the Felberpalooza - but these points don't directly compare to my other price data, since they represent a whole other set of local price considerations.

The end of this slide actually came just before the election. Gas prices hit a minimum of $2.139/gallon on 11/2. On my very next fill-up (at the same station as the $2.139 gas) gas was two cents more a mere five days later, on 11/7 - Election Day. The price jumped another four cents to $2.199/gallon by 11/13, and on 11/17 - my last fill-up - the price had jumped another seven cents to $2.269/gallon, a total increase of 11 cents per gallon since Election Day, or 13 cents per gallon since the minimum price on 11/2.

Did the Bush Administration manipulate the cost of gas in the weeks leading up to the election? If they did, I wasn't very impressed, and neither were a sufficient number of voters. If you want to get my attention, take us back to the happy days of 1999 and the Clinton Administration, when gas was under a dollar a gallon! In the meantime, I guess we'll have to watch and see what happens to the price of gas in the coming weeks.


rimalicious said...

Every time we drive by a gas station and comment on the price, Scott says "When it goes down a nother dollar I'll be happy." I recently reminded him that not long ago it was a dollar MORE. Of course, that's what THEY want us to remember...

Anonymous said...

Thanks for that info, DB. I was wondering if the president was capable of manipulating gas prices -- what about getting help from the Saudis? Remember Bush cut that deal with the Saudis last fall ... I dunno, though.

I just want the prices to stay around $2 at this point ... amazing how they've trained us. Next time they crank it up to $4 a gallon and then give us relief at $3 a gallon.

As far as 1999, one thing I do know is that OPEC got its shit together in March 1999, when the price of gas hit about 90 cents a gallon. Ever since then, OPEC has maintained discipline, which is why the price has continued to rise and remains high.

Until one nation breaks off and busts the cartel (which has happened many times in the past -- usually Nigeria), we're at their mercy until we start doing shale oil or something like it.

Bill @ IB

Anonymous said...

The price of gas goes down after the summer driving season which coincides with fall elections. What refineries are doing matters. I don't seriously think the Bush Administration has much control over the price of gas.

Cheap gas isn't going to help the environment.

Super G

Anonymous said...

What I would like to see is an analysis of Setember - November of the last six years, to see if the price really is election dependent. I don't think we'd see a pattern -- refineries are switching over from gasoline to heating fuel this time of year (after the summer driving season ends, as Super G points out)and I don't think those cycles changes from year to year. We just notice it more at $2.25 a gallon.

And cheap gas isn't good for the environment. It's a luxury we've enjoyed in the US a lot longer than anyone else. We can kvetch all we want about OPEC, but it's their resource and they can charge whatever they want for it. We would do the same, given the opportunity.

Anonymous said...

Re: OPEC. The issue isn't that "they can charge what they want," it's that OPEC is a cartel, usually illegal in free markets. When the cartel is succeeding, OPEC can engage in what's known as price-fixing. It's highly illegal within countries. When the cartel is failing, the price drops because the market is determining the price.

OPEC prices are far above market prices, and that's one reason why the price is so high. Oil costs less than $10 a barrel to pump and ship.

Bill @ IB