According to Larry Kudlow, media coverage often highlights rising gasoline prices while overlooking a significant increase in consumer spending, which has reportedly grown by 3.5% after accounting for inflation.
During the third quarter, U.S. oil companies reported substantial profits, largely driven by surging oil prices due to global supply constraints, which have in turn raised the costs for consumers at gas stations.
ExxonMobil, the largest oil producer in the U.S. by market value, revealed that it earned more from refining operations than from exploration and drilling for the first time in at least six years.
Meanwhile, Chevron also announced that its downstream earnings for the third quarter were the highest in the same period historically.
This increase in revenue comes at a time when American consumers are already grappling with higher gasoline prices. Factors like the conflict in Iran affecting oil supplies from the Middle East, along with the ongoing war between Russia and Ukraine, have strained energy infrastructure.
American consumers have experienced a noticeable increase in gas prices this year, with national prices at times rising above $4 per gallon, as per AAA data.
AAA reported that the national average for a gallon of regular gasoline was $4.20 as of Friday, which shows a slight decrease from $4.43 a month ago, but remains significantly above last year’s average of $3.03.
Additionally, diesel prices reached record highs last month, peaking at $6.52 per gallon on September 22, as noted by AAA.
The rising costs of diesel are particularly impactful for the trucking industry, as these expenses can trickle down to consumers in the prices of groceries and other goods that rely on transportation to reach stores nationwide.
Experts suggest that Republicans might face similar electoral challenges as Democrats due to elevated gas prices as the midterm elections approach.
Recent data from the Labor Department illustrates the increase in gas prices that Americans have been confronting over the past year. The September consumer price index (CPI) from the Bureau of Labor Statistics showed gas prices had jumped 9.1% monthly and were up 34.2% from the previous year.
Since the war in Iran began in late February, gas prices have experienced considerable fluctuations; BLS data reveals monthly increases of 21.2% in March, 5.4% in April, and 7% in May.
After a lull in hostilities during the summer, gas prices fell by 9.7% in June and 2.9% in July. However, renewed concerns regarding the potential resumption of conflicts and their impact on energy supplies contributed to another rise in prices, which went up by 3.9% in August and 9.1% in September.
