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Drop in Gasoline Prices Blunts GOP Weapon Ahead of Midterms

(Bloomberg) -- Republicans who have been using eye-popping gasoline prices as a potent political tool to bash Democrats in the run-up to the midterm election have a problem: Steadily falling prices at the pump.

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Gasoline prices peaked at more than $5 a gallon in June, providing easy fodder for Republicans to blame vulnerable Democrats and the Biden administration as they seek to reclaim the House and Senate in November.

But with just months to go before the vote, gasoline prices have dropped sharply and keep falling, softening their blow. The average price was down to $3.892 a gallon as of Monday, according to data from auto club AAA. Gasoline has fallen for 70 straight days, the longest streak of declines since early 2015.

And the decline is projected to continue as the peak summer driving season comes to an end.

“It mutes what was a very powerful weapon for Republicans,” said Benjamin Salisbury, director of research at Height Capital Markets. “At the start of the summer some people were talking about $6 gasoline. That would have been a disaster.”

With signs posted prominently at corner stations, the price of gasoline remains one of the most visible signs of inflation. And voters aren’t shy about punishing politicians for cost increases.

“Gas prices are very important to voters and it coming down bodes well for Democrats everywhere in America,” said Dale Butland, a Democratic strategist. “You see it every time you fill up your tank.”

While declines in fuel prices weaken the issue’s intensity, it has not completely gone away. Prices remain relatively high and are linked to the issue of broader inflation, said Mike McKenna, a GOP strategist and pollster.

“It’s still a salient point and it’s still a thing with voters,” McKenna said of gasoline prices.

“If you’re an F student, and all of sudden become a D-minus student, your parents all of a sudden are like ‘yay’. And that’s what we are looking at.”

The recent drop has coincided with broad, albeit choppy, declines in the oil market as worries about an economic slowdown weighed on crude futures.

Read more: US Gasoline Falls Below $4, Soothing Inflation Pressure

That’s led President Joe Biden to take credit for the lower prices, including in a tweet earlier this month where he said his decision to unleash a historic amount of crude oil -- one million barrels a day -- from the nation’s emergency supply has provided relief. The Treasury Department said in July the administration’s efforts to tap the oil reserve, coordinated with similar draw downs in other countries, had resulted in a reduction of 20 to 40 cents per gallon.

“We’ve been working really hard to bring the price down,” Biden said last month.

Record gasoline prices emerged as a political albatross for Biden, even as he staked his presidency on enacting historic climate change mitigation laws. Last week, Biden signed a sweeping climate bill that includes $374 billion in new spending to speed up clean-energy deployment, such as electric car adoption. But in July, he was in Saudi Arabia trying to persuade OPEC+ to pump more oil.

Prices are still about $1.50 higher than when Biden took office when demand was still muted by the pandemic. Prices have since surged due to factors that include capacity limitations, sanctions on Russia that have made oil more expensive and a resurgence in driving as pandemic restrictions eased. Saudi Arabian Energy Minister Prince Abdulaziz bin Salman has warned of potential OPEC+ production cuts, which could propel prices higher still.

By closely associating with the price of gasoline, the administration risks taking the blame if prices increase again.

“If it changes again, Republicans will gain a lot of leverage,” said Kevin Book, managing director of research firm ClearView Energy Partners.

But the declining prices have provided some relief for vulnerable lawmakers like Representative Marcy Kaptur, an Ohio Democrat, who has been hammered with ads from national conservative groups blaming her for supporting Biden’s energy agenda.

“It’s kind of settled down a bit,” Kaptur said of the attacks. “We’ve had some stabilization and prices might fall even more.”

The price of gasoline has also featured prominently in other battleground states, like energy-producing Pennsylvania, where John Fetterman is competing with celebrity physician Mehmet Oz for a Senate seat left open by retiring Senator Pat Toomey.

“Gas prices are FINALLY getting lower,” Fetterman tweeted, while repeating Democratic talking points about blaming oil companies for gouging consumers.

It’s also possible that gasoline prices rise again, particularly if Europe sanctions Russian crude, said James Lucier, the managing director of research firm Capital Alpha Partners.

“The idea that gasoline prices have come down relative to their peak probably reassures urbanites who don’t drive too much or wealthy suburban voters who don’t need to worry about their food and gasoline costs, but for swing voters, independents, and working class people who drive to work, it remains a critical issue,” Lucier said.

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