Rising Gasoline Prices May Also Be on Trump's Radar
  • 6 years ago
Investing.com - President Trump thinks crude oil prices are too high, but he may also have his eye on rising gasoline prices, which just eclipsed their 2017 peak and are closing in on a three-year high.The average price of a gallon of gasoline is now $2.78, 12% higher than a year ago, according to GasBuddy, which tracks real-time prices at the pump.A little more than two years ago, prices were as low as $1.70 a gallon."Motorists have a very short memory when it comes to gasoline prices," says Patrick DeHaan, senior analyst at GasBuddy. "We're starting to get to the tipping point, where you'll see some behavioral changes,"Neither GasBuddy nor AAA expect the average price to hit the psychologically important level of $3 a gallon, but both admit it is possible, given the uptrend in oil prices.DeHaan estimates that each $1 increase in the price of a gallon of oil mean a 2-3 cent increase in a gallon of gasoline.Given rising wages and the overall strength of the economy, consumers -- and voters--are likely to take a small, temporary spike in stride.Some analysts, however, say a worse-case scenario for crude oil could take prices from their current level of almost $70 a barrel to $100 a barrel.That would certainly cause pain for businesses and consumers.Economists at Deutsche Bank (DE:DBKGn) estimate that a sustained $1 increase in gasoline prices would completely offset the disposable income gains from Trump's tax cut package.And that's not a welcome scenario in a midterm election year.