Rising US Pump Prices Fuel GOP Attacks, Foreshadowing 2024 Blitz

(Bloomberg) -- Rising pump prices have already armed Republicans with a fresh weapon to bash President Joe Biden as they take aim at his climate policies and economic strategy — a precursor of what’s to come as the election season heats up.

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Gasoline’s rally to the highest level in 10 months comes amid concerns about a tight oil market, with Saudi Arabia cutting production and Russia curtailing exports, alongside better-than-expected US economic data. And though fuel costs remained modest through May and June, the recent advance is another reminder of how inflation is eating into Americans’ wallets.

“Americans have been very quick to blame the White House” for past price spikes, said Patrick DeHaan, head of petroleum analysis at fuel tracker Gas Buddy. “Going into an election you don’t want to be a president who is getting a lot of air time for high oil or gas prices. Even above $4 a gallon is going to be very difficult.”

Retail gasoline is already flirting with that level — or surpassed it — across some of the country, with unleaded now averaging $3.875 a gallon, according to auto club AAA. Even so, prices are well below where they were at the start of last summer, when the national average reached an eye-popping $5 a gallon — and even topped $6 a gallon in California.

Republicans have taken notice. From Washington to Iowa, they’ve seized on rising prices and blamed Biden’s environmental policies, including a 2021 move to revoke a permit for TC Energy Corp.’s proposed Keystone XL pipeline and the throttling of oil and gas leasing on federal lands. Though analysts say the actions haven’t significantly affected near-term oil production and prices, they are powerful political fodder for Republicans looking to disarm Biden’s central campaign pitch of “Bidenomics.”

“President Biden has forced Americans to bear the cost of his radical agenda,” House Speaker Kevin McCarthy said in a email last week. “Higher prices, greater uncertainty and out-of-touch policies: That’s Bidenomics.”

Pump prices are one of the most visible signs of inflation, a key issue for swing voters who will be key on Election Day. “It’s the only thing you buy where you stand there and the numbers scroll by,” said Benjamin Salisbury, director of research at Height Capital Markets. “It has a deeper impact on the American consumer and voter than practically any other issue.”

And polling shows the economy is weighing heavily on the president’s approval rating — particularly among independent voters — noted James Lucier, managing director at research group Capital Alpha Partners. Biden is “more vulnerable because of the perception that inflation and the economy have been worse under him.”

At the Iowa state fair, former Vice President Mike Pence highlighted high gasoline prices as he laid out a vision for US energy policy that includes more oil leasing and fewer regulatory barriers. He also released a campaign video accusing Biden of waging a “war on energy” that’s raising costs from the fuel pump to the electric meter.

The trend is setting off alarm bells at the White House. The Biden administration earlier this month delayed a plan to begin replenishing the nation’s emergency reserve as oil futures climbed above $80 a barrel, putting potential purchases above a US price target and threatening to further stoke the crude rally.

For Biden, a major risk is that his campaign pitch is intertwined with the issue. The president and Democratic allies have been touting his sweeping climate-and-tax law, the Inflation Reduction Act, which is steering hundreds of billions of dollars toward electric vehicles and other clean-energy resources as a way to “generate economic growth” and drive a green transition that promises to shield Americans from volatile energy prices.

But to some voters, it’s just a vivid reminder of how feckless the president is against gasoline prices today. “It’s not like he’s out there talking about ‘how can I help you with your gas prices.’ He’s out there talking about pretty soon you won’t need gas,” Salisbury said. When it comes to pump prices, “he’s wrapped his political identity around transition, rather than mitigation.”

--With assistance from Stephanie Lai.

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