How does the president control gas prices? Do government policies determine the price of gas in America? These are common questions asked by drivers in America who want to know how much power the president has on gas in the country.
Generally, gas prices are determined by the demand and supply curve. Thus, one can say the president does not have much power when it comes to determining gas prices. Nonetheless, government policies have little impact on the price of gas. For instance, the tax rates in states like California, Hawaii, Florida, and New York contribute to the high cost of gas in these states. But how much do these policies affect gas prices in the US?
Let’s find the answer to this question below. In addition, I will also give you details on the question, how does the president control gas prices?
Who controls gas prices in the world?
There is no single factor or person controlling gas prices in the world. The market forces of demand and supply are the determinant factor for gas prices anywhere in the world. Usually, the higher the demand for gas in a region or country, the higher the price, especially if there is a low supply in that place.
For instance, in America, there is always a high demand for gas in California, Hawaii, and Florida, but there is a low supply in these states. That is the cause of high gas prices in these states.
Does the government control gas prices?
The government does not control gas prices. However, government policies can still influence the price of gas in America. The major determinant of gas prices is the market forces of demand and supply.
Who controls the gas prices?
No single person has control over the price of gas. Many factors contribute to the current gas prices in America. They include:
- Demand and supply curve
- The price of crude oil
- The cost of importing gas into some states
- The tax rate
- The amount of crude oil produced by OPEC member countries
How does the president control gas prices?
The president can control gas prices through policies and legislation. However, he has no direct power to control gas prices in the United States of America. What controls gas prices is global oil prices. Oil prices are controlled by demand and supply.
Simply put, the price of crude oil has direct control over gas prices and the price of other petroleum products.
How does OPEC control gas prices?
Organization of the Petroleum Exporting Countries (OPEC) is the body responsible for crude oil exportation in the world. Accordingly, major oil-producing countries like Saudi Arabia, Qatar, and the US belong to it. OPEC determines the amount of oil each member state can export daily.
With this strategy, it controls the price of crude oil, which determines how much gas will be sold. Therefore, one can correctly say that OPEC controls gas prices by controlling crude oil production and the exportation of its member states.
Should the government set the price of gasoline?
For many economists and gas price experts, the government should not set the price of gasoline because it will lead to a shortage of the product. According to them, it will only solve the problem of inflation temporarily but will lead to a low supply of gasoline in the long run, which will be detrimental to the economy.