US President Joe Biden discusses the US response to Russia’s invasion of Ukraine, and at the CEO quarterly meeting of the Business Roundtable held in Washington, DC on March 21, 2022, a possible cyber attack from Russia Warn the CEO about. REUTERS / Leah Millis
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Washington, March 23 -US President Joe Biden records ahead of the important summer driving season when millions of Americans fill their tanks and hit the road for vacation. Has few attractive policy options for managing high US gasoline prices.
“The president, the national security team, and the economic team are currently working overtime to evaluate and consider various domestic options,” White House spokeswoman Jen Psaki said on Tuesday.
Publicly, White House officials said all options were at the table. Not all of them are detailed, but they include petrol tax holidays or gas cards that offer rebates to consumers. Possibility of relaxation of the Jones Law. This is a law that requires trade union labor to be used to carry domestic cargo in American-made tankers. Lifting sanctions on oil-producing countries.
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Personally, all these options are politically complex, and few have the potential to actually significantly reduce gas prices, according to two sources familiar with government thinking. Says.
“They’re perusing the menu and can’t find what they want to eat,” said Stephen Brown, a veteran oil lobbyist who consults with an energy company.
Last week, after Russia invaded Ukraine, US pump prices reached record highs. Retail petrol prices fell from a record of $ 4.331 on Friday, but remained at $ 4.237 per gallon on Wednesday, according to data from the American Automobile Association.
Reuters graphics
Republicans in the US Congress have blamed Biden’s energy policy while fuel prices are skyrocketing around the world. Many believe that this issue can increase their chances in the November midterm elections.
“Biden faces angry voters who see pump prices more often than Ukrainian suffering,” said Ed Hills, an energy economist at the University of Houston.
Mr Hills said policy options help lower gasoline prices moderately, but are less effective on real problems. Soaring oil prices remained around $ 120 a barrel after a sharp drop from a high of about $ 139 a barrel on March 7.
The government is calling on energy companies to increase US oil production from the current 11.6 million barrels per day, but analysts say it’s not easy.
Andrew Lipow, President of Lipow Oil Associates in Houston, said:
Tax holiday
Federal gas tax holidays don’t lower prices that much, but they do hurt the financing of income-dependent infrastructure projects. Drivers buying 10 gallons, which cost more than $ 40 at the current price, can save less than $ 2 if federal gas tax is exempted.
The federal gas tax is just over 18 cents per gallon. Most states impose higher ones. The highest is Pennsylvania at 57.6 cents, followed by California at 53.3 cents. Several states, such as Florida and Maryland, are working to stop the petrol tax.
According to numerous interviews, lawmakers have asked US refinery officials for their views on petrol tax holidays, but the response was not encouraging.
“We’re telling them that they won’t have a big impact on gasoline prices,” said the chief executive officer of a US refiner. “To lower gas prices, start by lowering oil prices.”
More ethanol?
A bipartisan group of Congressman Farmbert is urging the White House to lift the summer ban on a high-ethanol mixture of gasoline called E15, which is cheaper than standard E10 fuel. However, the E15 was banned in the summer due to smog concerns, and the White House climate authorities are opposed to lifting the ban.
The refining industry is also strongly opposed to rising ethanol consumption, which will increase demand for corn when soaring food prices are spurring inflation.
When asked about E15 petrol, Psaki simply replied that it was “in the options menu.”
Jones Act
Abandoning the Jones Law may help move oil to refineries on the East and West Coasts, but it can offend trade unions. Washington has taken a temporary step in an emergency, such as when a hacker shuts down the largest fuel pipeline in the United States.
“There is no way the White House can do this,” said one refiner. “There is a history of lifting this during supply concerns, it doesn’t matter.”
Gas card
The White House has considered giving Americans a petrol card to offset the highs, but now, due to opposition from lawmakers who questioned its effectiveness, according to controversial sources. However, I abandoned the plan.
Some were concerned that issuing gas cards would be cumbersome for the Internal Revenue Service and could delay income tax returns. Government officials pointed out that the card was stolen from the mailbox and quoted concerns about fraud.
“We are discussing all the ideas with Congress. Everything has its pros and cons,” officials said.
Venezuela, Iran
This month, US officials held bilateral talks with Venezuelan President Nicolas Maduro for the first time in years to discuss lifting sanctions.
But Venezuelan opposition leaders are putting pressure on Washington to condition the relaxation of oil sanctions on political concessions.read more
Apart from this, the United States and Iran have made progress in a nuclear deal that could add more oil to tight markets.
Republicans and others have criticized the negotiations between Venezuela and Iran, saying the White House has succumbed to the dictator.
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Report by Jarrett Renshaw; edited by Heather Timmons and David Gregorio
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