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Gas prices rise: Is Obama to blame?

Gas prices are 14 percent higher than a year ago, though US demand has risen only 0.7 percent. So what – or who – is driving up prices? The Heritage Foundation points a finger at Obama's environmental policies.

By Ron SchererStaff writer / January 21, 2011

At Geller Automotive in Minneapolis, the price for Unleaded Plus was listed as 'WOW' on Jan. 19. A station employee said the sign is a statement against the high cost of gasoline.

Jim Mone / AP


New York

This is the time of year when gasoline prices normally go down.

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Instead, prices at the pump have been rising, hitting $3.12 per gallon nationally on Friday, according to AAA, the motorists club. That's 39 cents a gallon – 14 percent – higher than a year ago.

Ironically, American demand for gasoline has risen only 0.7 percent in the past year.

So, what – or who – is responsible for the price increase? President Obama? China? The oil companies?

In the months ahead, the blame game is likely to pick up. Last week, the conservative Heritage Foundation said the Obama Administration and its allies are making things worse with their restrictions on oil drilling. Public Citizen, a Washington-based watchdog group, says the bad guys are not in Washington but on Wall Street, where commodity speculators are driving up the price of oil. And, on Friday, in a press conference, the American Petroleum Institute (API) laid some of the blame on rising demand from China and India.

Even though gas prices have been rising since Labor Day, it is not the chief worry of Americans – yet.

“It’s a stealth issue,” says Dennis Jacobe, chief economist at the Gallup Organization in Washington. “It will come up and bite people at some point, but it’s not surfacing in a lot of our polling.”

In a recent Gallup Poll, he says, the price of gasoline is the third concern of Americans following jobs and the budget deficit. “It’s just not able to rise through all the other problems to catch people's attention,” he says.

If prices keep rising, that might change. The last time gasoline prices rose through the winter was in January 2008. By July, the price at the pump had peaked at $4.11 a gallon. Online, people proposed boycotts of oil companies and told sagas of high prices causing consumer angst.

Of course, in summer 2008, President Bush was in the White House and there were no restrictions on drilling for new oil – but the price rose anyway. At the time, some blamed energy speculators for driving up crude oil prices, which peaked at about $140 a barrel.

The same thing is happening again, says Tyson Slocum, an energy analyst at Public Citizen.

"We have not adjusted the rules since a speculative bubble occurred in 2008,” he says. “A speculative-driven bubble ... has formed again in the commodity markets.”


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