Gasoline fell below $4 a gallon this week for the first time since July, and the establishment press wants you to celebrate — never mind that a year ago the same gallon cost $3.07.
The national average hit $3.98 on Tuesday, according to AAA, down from a peak of $4.56 earlier this year. CNBC called it "relief at the pump." CBS noted prices are down 17 cents from a week ago. What neither outlet emphasized: the price is still nearly a dollar higher than this time last year, diesel still sits at $6.16 a gallon, and the main reason for the dip is the seasonal switch to cheaper winter-blend fuel — not any policy victory.
Federal rules require stations to sell a more expensive summer blend from June through mid-September. When that mandate lifts, production costs drop and prices follow. AAA says gas typically falls 10 to 30 cents per gallon in winter months. Bespoke Investment Group told CNBC the decline is "perfectly normal" for this time of year and if it weren't happening, "there would really be something wrong."
The other factor driving prices down is oil itself. Brent crude briefly fell below $90 a barrel for the first time since August as hopes built that the U.S.-Iran conflict, now approaching nine months, might de-escalate. President Trump told CBS's "60 Minutes" he is "not looking" to escalate the war. On social media, he posted about an "excellent" conversation with Qatar's prime minister and said a return to full hostilities seems "quite unlikely." Gulf crude exports have recovered to an estimated 80 to 85 percent of prewar levels, according to ING.
But the damage is already done. The Bureau of Labor Statistics reported the Consumer Price Index climbed 0.4 percent last month — above the 0.3 percent analysts expected. Core CPI also beat estimates at 0.3 percent. Federal Reserve Governor Christopher Waller warned that energy shocks may have more persistent effects on inflation than before the pandemic. "While I am pleased to see energy prices down from their high rates," he told CNBC, "they are still quite elevated relative to the start of the year."
Over half of states now average below $4, IBT reported. But experts consulted by CNN said not to expect prices back below $3 anytime soon. So the new baseline, apparently, is paying a dollar more per gallon than last year and being told to feel relieved about it.
The question nobody in the press wants to ask: if a seasonal formula change and a fragile ceasefire are what passes for a win, what does a loss look like?
