How the ‘Trump Effect’ Is Making Florida’s Gas Price Problems Worse
The impact of President Donald Trump’s decision to end a long-running drought has left Florida with some of the lowest gas prices in the nation.
But while Florida is not the only state grappling with high gas prices, the state’s predicament is particularly pronounced.
“Gas prices in Florida have risen at a rate that is far above the national average for the same price,” said David G. Lauter, a senior economist at the National Association of Realtors.
“If we are going to be able to get gas at prices that are competitive with the rest of the country, we have to get a lot more supply,” he said.
The average price for gas in Florida increased from $2.15 a gallon in March 2017 to $2 the week of the president’s decision.
And gas prices are still much higher than they were before the drought began.
The state’s average price is $3.70 a gallon.
But even with gas prices rising so rapidly, it is hard to know whether this will make the situation worse.
“The cost of producing gasoline in the United States has stayed the same,” said Mark B. Shuster, president and CEO of the Florida Association of Gas Consumers.
Shuster said that because the federal government does not guarantee a steady supply of gasoline, the impact of a sudden shortage of fuel could be worse than it is now.
“As a result of the Trump Administration’s decision, the price of gasoline will continue to rise for years to come,” Shuster said.
“And the result of that price hike is that gasoline prices in our state have already reached a level that makes Florida’s gas prices even more unaffordable than they are now.”
The effect of the droughtOn average, the cost of gasoline in Florida has increased from just over $1.50 to nearly $2 a gallon over the past year.
But the state is not alone.
Gasoline prices have increased by nearly $1 per gallon in Alabama, Pennsylvania and Georgia over the same period, according to the National Conference of State Legislatures.
The problem is not limited to Florida.
The National Association for Business Economics estimates that more than 40 percent of the states gas industry relies on oil and gas production for a significant portion of its income.
“We have a lot of drilling companies that are shutting down,” said Joe Stiglitz, chief economist at The Heritage Foundation.
“We have oil and natural gas companies that have been cutting back on their production.”
“In the next few years, we will have to start building pipelines and building other infrastructure that will make our state even more dependent on fossil fuels,” Stigliz added.
While gas prices have surged, so have the costs of making gasoline.
Gas prices in Michigan have risen by more than 50 percent over the last two years.
And the cost to produce gas in North Dakota has increased by almost 10 percent over that time.
While some analysts believe that higher gasoline prices will force companies to cut jobs, that does not appear to be happening.
The percentage of manufacturing jobs that have gone to renewable energy sources is currently in the range of 10 percent, according the National Federation of Independent Business.
But with a growing number of Americans opting for solar and other renewable energy, companies that rely on fossil fuel energy could have to make the transition sooner than they would have under President Trump.