COLUMBUS, Ohio — Gas prices have fallen just over a nickel in the Columbus area since last week, according to GasBuddy.
AAA reports 53 million Americans plan on hitting the road, and consumers are hoping prices will continue to fall ahead of Thanksgiving and the holidays, especially after President Biden’s announcement Tuesday that the U.S. Strategic Petroleum Reserve will release 50 million barrels of oil.
“Right now, I will do what needs to be done to reduce the price you pay at the pump,” Mr. Biden said as he addressed the nation over the economy. “Today the price of gas in America on average is $3.40 a gallon but in California it's much higher. The impact is real. But the fact is we've faced even worse fights before.”
Will the release of the largest amount of oil reserves in United States history move the needle at the pump? Dr. Jeffrey Bielicki of the Ohio State University Sustainability Institute says the current price of gas was already estimated into costs by speculators.
“Fifty million barrels. It sounds like a lot. But we use in the United States about 18 million barrels per day,” said Bielicki. “So in essence, that's about a few days’ worth of, of total consumption in the United States. Just it's less than 10% of what's held in the Strategic Petroleum Reserve. Right now. We have a little over 600 million barrels in the Strategic Petroleum Reserve right now. And you know that reserve was set up to buffer against supply disruptions originally set up in the mid-70s, after the energy crisis in the oil embargo.”
Bielicki says prices will most likely come down over the next few months but can’t guarantee a significant drop before the holidays.
“I do think that, you know, prices will start to come down a bit as we can ramp up as drilling rigs… and again, this takes a few months, that’s to really change the amount of production that's happening. I do think that this is, is just part of a general cycle and trend. That's, you know, particularly hitting perhaps a number of people in United States and elsewhere, harder given, you know, inflation and given that there's a large number of people that that live closer to the margins, paycheck to paycheck, and especially around the holidays, this isn't helpful,” said Bielicki.
Dr. Aleksandar Tomic is an economist and associate dean at Boston College says this is more of an inflation issue than an oil issue.
“We are seeing a surge in prices in everything, not just the oil… we had COVID-19 happen, and then the economy took a turn for the worst, but not for a very long time, because the demand did not suffer quite as much as it did in previous recessions,” said Tomic. “The other thing to keep in mind, is this feels particularly bad, because all prices crash throughout COVID-19. I mean, they cost very violently, very quickly, we got below $2 a gallon.”
Tomic says he hopes Biden’s announcement does not lean further to government control over gas prices.
“This was just, you know, symbolic, and, you know, hopefully it's not an indicator of active attempts to do price control and pretend that inflation is not a monetary phenomenon. That is not something government can do.”