Biden and Democrats are turning to energy companies for “price gouging” and increasing gas station troubles when oil drops in price but gas still costs $4.31 a gallon.
- Jen Psaki noted at the start of her daily briefing that crude oil prices have fallen to $94 a barrel – down from a peak of over $130 last week.
- Biden expressed a similar sentiment this morning: “Oil and gas companies should not increase their profits at the expense of hard-working Americans.”
- According to the AAA, the average price of a gallon of gasoline on Wednesday was $4.31, one penny less than on Tuesday and two pennies less than on Monday.
- Oil and gas companies don’t own a large number of gas stations—large refineries own less than 5 percent of the approximately 150,000 retail gas stations in the US.
Gas station prices are slowly declining, although the price of a barrel of crude oil is falling much faster, and Democrats are blaming fuel companies.
White House press secretary Jen Psaki noted at the start of her daily briefing that crude oil prices have fallen to $94 a barrel – down from a peak of over $130 last week.
“When oil prices were at this level a month ago, the average cost of a gallon of gasoline was $3.49, and now the average cost of a gallon of gasoline is $4.32,” she said. “When it comes to oil and gas prices, many agree that gas prices rise quickly and fall slowly, the so-called rocket and feather phenomenon.”
“If gas retailers’ costs go down, they should immediately pass those savings on to consumers,” she said.
Biden used his podium this morning to express a similar sentiment: “Oil prices are down, gas prices should be too,” he tweeted. “Oil and gas companies should not increase their profits at the expense of hard-working Americans.”
According to the AAA, the average price of a gallon of gasoline on Wednesday was $4.31, one penny less than on Tuesday and two pennies less than on Monday. At the same time, Brent crude oil prices fell 28% between the March 6 peak and Tuesday’s close. According to Moody’s analytics, every 10 cents increase in the cost of a gallon of gas brings fuel companies about $11 billion during the year.
Psaki noted at the start of her daily briefing that crude oil prices have fallen to $94 a barrel – down from a peak of over $130 last week.
At the same time, the high cost of fuel greatly reduces GDP: according to Moody’s, for every penny of increased gas prices, consumers spend about $1.5 billion less a year.
But oil and gas companies don’t own many gas stations. Major refineries own less than 5 percent of the approximately 150,000 retail gas stations in the US. While many gas stations may list “Exxon Mobil” or “Shell” on their price tags, most are independently owned and authorized to operate under that brand. According to the National Association of Convenience Stores, more than 60% of retail outlets in the US are owned by a single person or family owning a single store.
The White House is increasingly disappointing with rising fuel prices due to Russia’s invasion of Ukraine. Even before the war, high prices for crude oil and natural gas led to 40-year-high inflation, which in turn led to a decline in the presidential poll.
Senator Chuck Schumer on Wednesday vowed to call senior oil and gas executives to testify in the coming weeks. “The astonishing disparity between falling oil prices and rising gas prices smacks of price gouging and is seriously hurting working Americans. The Senate will get answers,” the New York Democrat said on the Senate floor Wednesday.
As Democrats struggle to lower gas prices before the midterms begin, some have even called for Biden to suspend the federal gas tax. Lawmakers from both parties called on domestic oil companies to increase production.
“CEOs of large oil and gas companies should be informed that they will have to answer the Senate very soon,” Schumer said, noting the corporate share buybacks that the industry has carried out over the past few months.
Last week, Democrats in the House of Representatives wrote to congressional leaders calling for an investigation and hearing into the alleged price gouging. Their letter claimed that “the 24 largest players in the oil and gas industry have earned a record $174 billion in profits.”
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