Pain at the Pump: Who (or What) is Controlling Pump Prices?
In an election year, gas prices are more than just a concern for consumers. They become a hot topic in debates and fodder for those political ads we all love so much. Consumers’ pain at the pump can quickly turn into a reason for voting (or not voting) for a particular candidate.
In our May American Pulse survey, we asked respondents who or what they believe controls gas prices, and the American people were most likely to indicate that most control is held overseas. Nearly half of Adults 18+ believe that leaders in the Middle East are in control, followed by 44.3% who say that good ol’ supply and demand holds the power, while “International Conflicts” come in third. Under one in four say that Congress (24.4%) or the President (23.1%) are responsible for pump prices.
When breaking this down by generation, the youthful are more likely to spread the power out. While supply and demand tops their list, they are the least likely to say this basic economic principle controls gas prices. They are also the least likely to believe leaders in the Middle East are in control, but more likely than older generations to say the President and Congress are holding the reigns.
When we asked these questions in May, consumers had expected gas prices to be $3.95 per gallon by Memorial Day weekend, only to be pleasantly surprised when they were only at $3.67 per gallon (EIA.gov). With gas prices below expectations and continuing to decline (not to mention those $5/gallon summer forecasts we were hearing about heading into the Spring seemingly by the wayside), we decided to ask consumers in our June American Pulse survey who they believed was responsible for the drop in the average price per gallon, using the same list of available answers. In other words, we know who they think controls them, but who do they give credit to when things are going well?
For Adults 18+, supply and demand tops the list of responsible parties when it comes to prices declining, followed by consumers themselves (the “demand” side of that S+D equation).
As they did with the control, Gen Y was most likely to spread out the credit. Older generations were more likely to focus on supply and demand and consumers. 20.9% of Gen Y indicated that the President was responsible, compared to just 12.6% of Gen X, 6.2% of Boomers, and 4.5% of the Silent Generation. Congress followed the same trend with Gen Y being the most likely to indicate they were responsible for the drop in prices.
So, let’s bring this all back to the election. Will gas prices have a direct impact on who consumers vote for in the November?
If consumers are feeling the pinch (or even anticipating it) because of the dollars draining from their wallets when they fill up their tank, it seems the faces of the incumbents in the Oval Office and at the State House will be flashing in their minds along with the dollar signs. Steep gas prices could be an advantage for those looking to steal a seat in Congress or make Pennsylvania Avenue their new address. On the flip side, with consumers not giving a whole lot of credit to politicians currently holding office, a slight drop in gasoline prices alone probably won’t be the tipping point for incumbents to hold onto their seats. Either way, Gen Y is most likely to equate pump prices with political offices.
Source: American Pulse™ Survey, May & June 2012, Jun-12 N = 3603
© 2012, Prosper®