Democratic-run Washington is continuing to make an effort to address high gasoline prices, with President Joe Biden targeting refiners and a top senator taking aim at oil companies’ profits through an upcoming bill.
Analysts have been predicting defeats for Democrats in November’s midterm elections if high prices persist for fuels
and other essentials, and Republicans have frequently criticized the ruling party over inflation.
Biden in letters to major U.S. oil refiners called on them to “take immediate actions to increase the supply of gasoline, diesel and other refined product,” adding that he recognizes that some of the companies already have done exactly that.
“I understand that many factors contributed to the business decisions to reduce refinery capacity, which occurred before I took office. But at a time of war, refinery profit margins well above normal being passed directly onto American families are not acceptable,” the president wrote in the letters, which the White House released Wednesday, saying they went to Marathon
Biden asked the companies to provide Energy Secretary Jennifer Granholm with explanations for any reductions in refining capacity since 2020, along with “concrete ideas that would address the immediate inventory, price and refining capacity issues in the coming months.” Biden said Granholm will convene an emergency meeting in the coming days.
Read more: Biden calls on refiners to produce more gasoline and diesel
And see: National averages on gas have reached $5 gallon
Meanwhile, Democratic Sen. Ron Wyden of Oregon plans to roll out a bill that would impose a 21% tax on the “excess” profits of oil and gas companies.
“While Americans are paying through the nose at the gas pump, Big Oil is raking in record profits, rewarding their CEOs and shareholders with stock buybacks, and using special tax loopholes to dodge paying taxes. I have a plan to end their profiteering at the expense of consumers,” said Wyden, who chairs the Senate Finance Committee, in a tweet on Wednesday.
In response to Biden’s letters, the American Petroleum Institute, a trade group for the oil and natural gas industry, called for the president to do more.
“While we appreciate the opportunity to open increased dialogue with the White House, the administration’s misguided policy agenda shifting away from domestic oil and natural gas has compounded inflationary pressures and added headwinds to companies’ daily efforts to meet growing energy needs while reducing emissions,” said the API’s president and CEO, Mike Sommers, in a statement.
“I reinforced in a letter to President Biden and his Cabinet yesterday ten meaningful policy actions to ultimately alleviate pain at the pump and strengthen national security, including approving critical energy infrastructure, increasing access to capital, holding energy lease sales, among other urgent priorities. Ahead of his travel to the Middle East next month, we urge the President to prioritize unlocking U.S. energy resources — that are the envy of the world — instead of increasing reliance on foreign sources.”
Biden is slated to make visits next month to Israel, the West Bank and Saudi Arabia, as his administration has determined that freezing out Crown Prince Mohammed bin Salman and other Saudis isn’t feasible at a time of skyrocketing prices at the gas pump.
Last week, the president criticized Exxon and other oil giants, saying they should use existing drilling permits and invest more, rather than spending on stock buybacks.
The White House is showing signs that it is more seriously considering a federal gasoline tax holiday, with Biden’s economic team discussing it recently, according to a Hill report. Administration officials previously have said a gas tax holiday is an option under consideration, though analysts have cautioned that could take away funds that were supposed to be needed for major infrastructure projects. The White House didn’t respond to a request for comment on the issue Wednesday.
Economists have warned that presidents lack powerful weapons for battling high prices.
A Barron’s analysis found that profits of gas stations are actually down this year.