Pejman Yousefzadeh notes that analysts are predicting significant drops in gas prices over the next few months as supplies increase and consumption grows at a rate that is slower than expected.
Gasoline tends to be an inelastic commodity, but a year of high prices do have an effect on people’s willingness and ability to reduce fuel usage. With the airlines being socked with even more restrictive security requirements, their fuel usage is down as well as more flights are cancelled due to security and fewer passengers. The end of summer means less driving and an end to some federal regulations demanding more expensive fuel blends.
Politically, there seems to be some correlation between gas prices and Presidential approval. That’s understandable, as gasoline prices are the most singularly visible sign of he economy’s overall health, and have a rather significant effect on the pocketbooks of American voters. A decrease in gas prices may ease some pressure on the GOP majority which is taking some of the blame for the increase in prices.
Will this be enough to have a significant effect on the election? It’s quite possible, although midterm elections tend to be more about local issues than national ones. However, the GOP needs all the help it can get, and if gas prices are closer to $2 than $3, voters will be less inclined to throw out incumbent politicians than they otherwise might be.