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« Ensign Says He'll Resign, But Maintains Innocence | Main | U.S. Authorizes Armed Drone Flights Over Libya »
Thursday
Apr212011

Demand Causing Gas Prices To Spike, Says Obama

Wondering why gas prices have skyrocketed lately? According to President Obama, the answer is simple; Growing demand.

During the third leg of his town hall tour this week, the President suggested that travellers can ease their pain at the pump by putting fewer miles on their vehicles.

“One of the key ways we’re gonna get gas prices down is just to use less oil,” Obama told an audience gathered at ElectraTherm, a green energy company located in Reno, Nev.

According to Triple-A, the national average price of gas hit $3.84 on Thursday.

“If you buy less, prices go down,” Obama added.

However, according to the Department of Energy, demand for fuel is actually lower now than it was this time last year, when prices on average were nearly a dollar less.

In fact, The Associated Press noted today that many Americans have decided to cut down on their driving, or are canceling vacation plans due to frighteningly high gas prices.

But the President argued today that his move to cut payroll taxes this year by almost two percent is helping to alleviate higher prices at the pump.

“We haven’t raised your taxes; we’ve lowered your taxes,” Obama said. “And that’s actually helping absorb some of the increased costs of gas prices and food prices that are out there right now.”

Yet analysts warn that if fuel prices continue to rise, the economy could tilt back into a recession as consumers decide to put off spending on other goods. Moreover, for consumers themselves, the added income generated by lower taxes may become moot should prices reach the $5 threshold.

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