Can the president control gas prices?
Critics of any president -- whether the target is George W. Bush, Barack Obama or any of the 42 men who preceded them -- are quick to blame him for things that are totally beyond his control. (Of course, the president and his supporters are equally quick to take credit for things that are beyond his control, but that's another story.) The price of gasoline is a perfect example. When George W. Bush was in office, Democrats blamed him for allowing gas prices to rise from $1.45 a gallon on his inauguration day to $4.05 a gallon by June 2008 [source: Thaler]. And now that Barack Obama is in the hot seat, Republicans are blaming his economic and energy policies for a similar price increase at the pump.
The truth is that no president -- whether Democrat or Republican, "big oil" buddy or alternative fuel friend -- can do much of anything to affect the short-term price of oil, and therefore gasoline. The overriding factor that determines the price of oil from day to day is the market principle of supply and demand [source: U.S. Energy Information Administration]. It comes down to simple economics: When demand is greater than supply, prices rise.
And demand is growing. Emerging superpowers like China and India are approaching the U.S. in their appetite for oil. To further complicate matters, much of the world's oil supply is tied up in the politically unstable Middle East. Unrest in Syria and Libya, and embargoes against Iranian oil put a significant squeeze on the global supply [source: Sommer]. The president can help build a more stable and secure Middle East through foreign policy decisions -- war or diplomacy? -- but these are long-term strategies that don't affect short-term price fluctuations at the pump.
What does affect these volatile price fluctuations at the pump? Find out on the next page.