Gas Prices and Inflation

American families have been feeling the economic squeeze. Prices are up, and a trip to the grocery store or the gas pump can lead to hard choices. But we need to be clear about one of the main drivers of inflation and price increases: greed. Corporate monopolies’ stranglehold on our economy has allowed fossil fuel companies and CEOs to raise prices and make record profits, while regular Americans foot the bill. In this Unpacked, we’ll go deep on rising costs.

What’s causing this?

Americans paid more at the pump this year. It’s because oil prices are up per barrel, right? Not even close. As of this writing, a barrel of oil cost roughly $85 –  $25 LESS than that same barrel cost ten years ago. But the price of gas is almost double what it was back then! And you know what comes next: obscene, record-shattering profits for oil companies. They, and other mega-corporations, are taking advantage of working-class American families, causing inflation and hurting our economy. Across the country, profits are soaring while regular people are suffering.

And it’s not just gas prices: basic commodities like groceries are more expensive.  It’s thanks in large part to giant global conglomerates like Kroger and Cargill raising prices for consumers – not because their costs are drastically higher or because they’re paying their workers more, but because they see an opportunity to make record-setting money for their executives and shareholders. These price hikes hit vulnerable Americans the hardest, and this year the Biden Administration took action, cracking down on price-fixing Big Chicken manufacturers like Tyson and JBS  and expanding support for independent ranchers and farmers.

But instead of helping Americans during tough times, MAGA Republican leaders like Kevin McCarthy and Rick Scott have fought every effort to make mega-corps pay their fair share in taxes. They’ve opposed President Biden’s programs to help struggling Americans during the COVID pandemic, and voted against every single piece of economic legislation that would help our communities. (Even when they take credit for the same programs they voted against!)

And their plans if they take control of Congress would make anyone with a sense of shame blush: even more tax cuts for the super-rich, expanded giveaways to corporations and energy companies, and huge cuts to programs like Medicare and Social Security. They’re perfectly willing to tank our economy, if it helps them politically or makes their donors rich.

Democrats: fighting to put money in your pocket

Democrats are investing in our communities, and are fighting to curb ‘greedflation’ and make sure profiteers don’t get to take advantage of consumers. And they’ve built important new programs designed to help us all get through tough times and strengthen our economy.

1. The Biden Administration has taken decisive action to lower the cost of gas. By going after price-gouging oil companies and increasing supply, they’ve sharply lowered the cost to fill up your car: prices at the pump are down 25% from last summer’s highs, and continue to fall.
2. Democrats in Congress passed landmark legislation to lower prescription drug costs, so Big Pharma can no longer charge an arm and a leg for many life-saving medications. And the Inflation Reduction Act capped the cost of insulin at $35 per month for the millions of diabetics on Medicare.
3. President Biden worked with Democrats in Congress to cancel $10,000 to $20,000 of student debt for millions of working and middle class Americans. Lifting the burden of crushing debt and making repayment easier helps our economy in two ways: First, it gives folks the freedom to buy the necessities they need, care for loved ones, and start a family. And without that debt, they can start a business, learn a new trade, or invest in their future – and this strengthens our economy even more in the long run. 

It’s more than just gas – it’s politics

There are two main culprits behind the elevated cost of gas: petrostates like Russia and Saudi Arabia, and price-gouging oil companies (and their Republican allies).

• Petrostates are countries with economies built on fossil fuel extraction and export. American reliance on fossil fuel, both domestic and imported, has helped prop up these regimes for decades and encouraged them to wield their supply as a political and economic weapon. With the invasion of Ukraine and harsh sanctions against Russian exports, President Biden is rejecting the petrostate paradigm—a choice that’s essential for global security, but not without its costs. And other petrostates are working to boost our fuel prices as well: Saudi Arabia, Russia, and the other OPEC+ nations slashed oil production in October, driving up prices before the mid-terms, destabilizing the American economy, and making it easier for their Republican allies in Congress to take control.  Vladimir Putin’s violent ambitions are impacting all of us, and the Putin Price Hike is real.
• Oil companies have posted record profits in recent years, especially as COVID-19 travel restrictions have loosened. Chevron, ExxonMobil, BP, and Shell have all been breaking records, even prior to the invasion of Ukraine. How? Price gouging. Oil industry CEOs have been intent on keeping the price of gas high to make up for lost pandemic profits, even as the cost per barrel for oil has dropped dramatically. Oil lobbyists’ deep investments in Republican politicians have protected these corporations, and the pre-election squeeze is a boon for their enablers in Congress at your expense.

Why it’s important

Price increases are hitting Americans hard, and voters are being primed to blame climate action and infrastructure spending instead of international bad actors and price-gouging mega-corporations. Republican candidates are leaning into the narrative that Democrats’ environmental regulations are pushing prices up, nevermind the fact that most of the policies they blame have never been law! Our dependence on oil companies and petrostates would deepen under Republican leadership and essential progress towards a sustainable energy economy will be lost. Beyond that, our reliance on petroleum is a security risk: as long as international bad actors can leverage their resources to fund wars, destabilize economies, and threaten international trade, we can’t be sure that this won’t happen again.

How we talk about it

1. Soaring gas prices were the result of Vladimir Putin’s war and price-gouging oil companies. The invasion of Ukraine sent the global oil market spinning, and our dependence on fossil fuels means that we’re going to feel it for a while. And that affects the prices of other goods and services, too. But the answer to this isn’t tax cuts for the rich and corporate handouts.
2. Democrats have fought to pass legislation that puts money back into your pocket during tough economic times. Under Joe Biden, we’re lowering prescription drug costs, creating millions of jobs and raising wages, and lifting the burden of student debt. Republicans have opposed every single measure, but that hasn’t stopped them from claiming credit on the campaign trail.
3. Republicans don’t have a serious plan to help working Americans. They’ve shown us through their actions the past two years: if Kevin McCarthy and MAGA Republicans take control of Congress, you can count on them to use tough economic times as an opportunity to further enrich corporate shareholders and wealthy executives. 
4. Republicans are more interested in using inflation and the pain that rising costs inflict on families as a political football than they are in addressing and solving the causes. MAGA Republicans, who support endless tax handouts to the wealthy and well-connected, have repeatedly opposed common-sense measures to help out regular Americans and save them hundreds, sometimes thousands, of dollars per month.
5. Republicans are on the side of the price-gougers. Since 2020, oil companies have contributed over $76 million to Republican candidates—and that’s not counting the millions of dollars in dark money they flood races with. Now, as they squeeze working families to pad their profits, Republicans are telling Americans to blame non-existent climate policies and President Biden. It’s no surprise that they unanimously voted against the Consumer Fuel Price Gouging Prevention Act in the House, siding again with corporate profits over people. If we want real solutions to oil industry exploitation, we need to keep their enablers out of power.
6. We can’t drill our way out of this. While Republicans scream for more drilling, Democrats know that the best way to build a stronger, more resilient economy is to reduce our demand for obsolete technologies like fossil fuel-dependent systems. The best time to kick fossil fuels was decades ago, but we’re in this situation today and we need to deal with its realities today. That means moving quickly to help working families manage the cost, while laying long-term plans to build a more sustainable and stable energy economy. That’s why Democrats are offering solutions like electric car subsidies and support for home efficiency upgrades that will move us towards renewable, affordable, and reliable energy independence.