Posted in: Gas Prices,
by Patrick DeHaan on Oct 18, 2012 01:47 PM
Gasoline prices have started to fall. Based on what some of our Facebook fans are saying on GasBuddy's fan page, many believe it's because the election. Really? There apparently is still the myth out there that gas prices react or drop ahead of an election. Gas prices usually do drop, yes, but it has nothing to do with the election.
First off, what are major factors that influence gasoline prices? Well, among the two largest, there is supply, and there is demand. Both of those two have a large bearing on gasoline prices. Without supply, gas prices are sky high. Without demand, gas prices are slashed. So why then do prices always fall into autumn and why does this have nothing to do with the election?
Autumn occurs whether there are elections or none. It occurs even without a presidential election. What does autumn bring? Colorful trees, yes. Cooler weather, yes. With both of those things it also means there isn't as much activity outside- there's less going to the beach, fewer vacations, etc. All of that means that we're sucking down less gasoline. As the cooler weather arrives, temperatures continue to drop, pushing gasoline demand lower.
In addition, less expensive gasoline that doesn't have to meet stringent summer EPA standards comes back into play- that helps as well. Demand drops, we switch to winter gasoline (meaning less special boutique fuels for big cities), and supply starts to increase. It's not magic, its what is normal. Just like gasoline prices rise every spring. Gasoline prices have a similar ride every year. They bottom out near the New Year, rise in late Winter, peak in April or May, drop in June, rise in July-September, and fall in the autumn. A vicious cycle perhaps, but a predictable one.
And all of that means that gasoline prices follow a trend, and that an election won't make a difference, whether its in July or January. Gasoline prices will keep their trend. There's no magic spigot that opens with gasoline before an election. That's absurd, and so is the belief that elections alter gas prices. Let the myth die.