Gasoline prices that had been drifting downward over the past three months have now reversed and risen this past week to a national average of $3.79 per gallon, according to the American Automobile Association. Last week, at a meeting of the White House Competition Council, President Joe Biden hectored oil companies and gasoline retailers telling them: "Bring down the prices you're charging at the pump to reflect the cost you pay for the product. Do it now. Do it now. Not a month from now—do it now."
Well, at least the president did implicitly acknowledge that there is a relationship between the cost of crude oil and the price of gasoline at the pump. In fact, the correlation between the two is quite close. Basically, when the price of a barrel of oil rises by $10, the price of a gallon of gasoline increases by 25 cents, calculates the St. Louis Federal Reserve Bank.
