Peach Tree Times

The Institute for Energy Research reports gas prices have been on a decline nationally and in Georgia thanks largely to inflation and what it calls demand destruction as gasoline consumption.

According to the IER, the lower gas prices are primarily driven by demand destruction, which refers to "persistent high prices or tight supplies that eventually lead to a drop in demand." During the week of July 8, national gasoline consumption dropped by 9.7% to 8.73 million barrels per day, according to data from the Energy Information Administration (EIA). 

Aside from the COVID-19 pandemic lockdown in 2020, this marks the lowest seasonal demand in 21 years and the steepest decline during 2022. The spike in gasoline prices made Americans go on a "buyers’ strike" this summer, according to the IER.

"While demand for gasoline has rebounded a bit, it remains below where it was two years ago as historically high prices keep more drivers off the road than COVID-19 lockdowns did in the summer of 2020," IER said in its report.

As a result of decreased consumption, the West Texas Intermediate oil price dropped below $100 per barrel, IER reports. The $8.50 per barrel premium of Brent oil to the U.S. West Texas Intermediate is the widest gap since mid-2019. The reduced gasoline consumption is lowering margins for refineries, causing them to switch production to more profitable fuels in an effort to protect themselves against losses.

This comes as President Joe Biden took to Twitter July 22, taking credit for lower gas prices.

"Gas prices are declining at one of the fastest rates we have seen in over a decade. We’re not letting up on our work to lower costs even further,” Biden wrote in his tweet.

Biden began placing blame for the rise in U.S. energy costs, particularly gas prices, on Russia's war with Ukraine, which started in late February, FOX News reports. His administration coined the phrase #PutinPriceHike on Twitter and frequently maintained that rising prices have "nothing to do" with his administration’s policies, telling the American people, "make no mistake, inflation is largely the fault of Putin."

According to the American Automobile Association (AAA), the current national gas average is $4.03 per gallon. When Biden entered office, the average was $2.33 per gallon. In Georgia, the state average is $3.60 per gallon, while a month ago it was $4.21 per gallon.