Diesel Prices: A Tale Of War and Peace [Commentary]
The global market that drives skyrocketing fuel prices is out of range of manipulation by the executive branch of the U.S. government, writes HDT Business/Washington Editor Contributing David Cullen.
![Diesel Prices: A Tale Of War and Peace [Commentary]](https://assets.bobitstudios.com/image/upload/f_auto,q_auto,dpr_auto,c_limit,w_920/david-cullen-washington-watch_1768074667858_cbybpy.png)
The global market that drives skyrocketing fuel prices is out of range of manipulation by the executive branch of the U.S. government, writes HDT Business/Washington Editor Contributing David Cullen.
Graphic: HDT
It may be easy to blame the president of the United States for skyrocketing fuel prices. Yet the global market that drives those prices is out of range of manipulation by the executive branch of the U.S. government. And that is a nonpartisan statement of historical fact.
Since all politics are local, I will underscore my point by sharing some wise words posted on Facebook by a good friend of mine who happens to stand on the opposite political aisle from me: “Largely an issue of supply and demand, gas prices are not dictated by the White House. During the pandemic, we had abundant supply and low demand. A high supply and low demand means low prices, while a low supply and high demand mean prices rise. In 2020, crude oil was almost worthless, even traded at negative prices.
“Even if construction wasn’t halted, the Keystone XL pipeline wasn’t in operation and therefore wouldn’t have an impact on current gas prices,” she continued. “If you go back and look at historical data, whether it was Bush, Obama, Trump, or Biden, gas prices go up and down no matter who’s in office.”
And, of course, the same goes for diesel prices.
Certain market pressures do determine whether fuel prices rise or fall:
The price and availability of crude oil.
The cost to refine crude oil.
The cost to distribute refined fuels.
The profit goals of oil companies and, since the 1970s, the machinations of the OPEC cartel.
My friend is not alone in thinking the White House has done all it can. Secretary of Commerce Gina Raimondo recently hammered the same nail home. At press time, Raimondo, well-known to trucking for implementing a trucks-only toll scheme while she was governor of Rhode Island, told CNN that there was not much more Biden can do to wrestle down fuel prices.
“You know, this [rising fuel prices] is, in large part, caused by Putin’s aggression,” she said. “Since Putin moved troops to the border of Ukraine, gas prices have gone up over $1.40 a gallon, and the president is asking for Congress and others for potential ideas… the reality is that there isn’t very much more to be done” by the administration.
The White House may have no tricks left up its sleeve, but that is not necessarily the case for Congress. Raimondo told CNN there is the possibility of a “gas tax holiday,” which would require action on Capitol Hill. That’s not likely, given the gridlock there.
But many statehouses across the country are not trapped in a political logjam and can take fairly swift action on fuel taxes.
Such is the case in Connecticut, where some Democrats, who hold the majority, are open to discussing a “diesel tax holiday” recently proposed by Republicans, per a local News12 report.
The states’ diesel excise tax now stands at 40.1 cents. Each July, it’s automatically adjusted based on wholesale fuel prices. Republicans want to cancel this year’s increase and suspend the tax entirely through the end of this year.
“Connecticut could afford this relief, but the Democrats and this governor don’t want to give it,” said State Rep. Vin Candelora (R-North Branford) at a news conference.
“We should definitely look at the diesel tax,” State Rep. Sean Scanlon (D-Guilford), co-chair of the tax writing committee, said. “It’s important for us to sit down, get in a room, roll our sleeves up, and figure out if there is a way that we can give folks that drive diesel a break.”
And Gov. Ned Lamont (D) said he’s open to canceling the automatic increase. The biggest indicator the Nutmeg State tax holiday will pass? It’s an election year.
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