But consumers are sitting on big cash piles amassed over the course of the pandemic, and because the United States produces gas domestically, higher prices could also incentivize companies to invest and supply more in the United States.
“It is risky to assume that the old rule about higher prices depress overall U.S. economic growth still applies,” Ian Shepherdson, an economist at Pantheon Economics, wrote in a recent note.
High gas prices could be a liability for Democrats during a midterm election year, given they hit voters right in the wallet. Republicans have already seized on gas prices as a talking point.
“Under Joe Biden, families are paying more for gas than ever before,” Ronna McDaniel, chairwoman of the Republican National Committee, said in a statement Tuesday.
But the White House is emphasizing that the price increases are the result of the actions of President Vladimir V. Putin of Russia, and Mr. Biden pointed out that the United States and its partners are releasing global petroleum reserves.
The president also seemed prepared to shift some blame to companies.
“To the oil and gas companies, and to the finance firms — we understand that Putin’s war against the people of Ukraine is causing prices to rise, we get that, that’s self-evident,” he said. He added, “It’s no excuse to exercise excessive price increases, or padding profits, or any kind of effort to exploit this situation or American consumers.”
Jason Horowitz and Constant Méheut contributed reporting.
Article source: https://www.nytimes.com/2022/03/08/business/economy/russian-oil-ban-economy.html
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