President Joe Biden wants the Federal Trade Commission to look into oil and gas firms’ “anti-consumer activity.” The price of gasoline has reached a seven-year high. According to Biden, the FTC has the jurisdiction to investigate if illegal activity is costing people money at the pump. His letter comes when petrol prices are on average more than a dollar higher than they were a year ago.
The price difference between finished and unrefined gasoline has surprised US President Joe Biden. In a New York Times op-ed published on Wednesday, he stated that the disparity is substantially above the pre-pandemic norm. He attributed the discrepancy to an “unexplained wide difference” between the two prices. “I will not accept hard-working Americans paying more for petrol as a result of possible criminal activity,” he told the commission.
According to the Energy Information Administration, average gas prices in the United States hit $3.41 per gallon on November 8. Fuel taxes account for around 15% of the average price per gallon paid by customers. According to economists, the actual cause of rising gas prices is a combination of circumstances outside the president’s control.
Furthermore, as the coronavirus quarantines were lifted, so was the demand for gas. The number of vehicle miles traveled fell from 272 billion in December 2019 to 166 billion in April. By the summer of 2021, highway traffic will have been restored to pre-pandemic levels. Due to supply chain and energy market disruptions, gas supply was reduced.
Hurricane Ida hampered oil drilling and refining in the Gulf of Mexico. Crude oil storage at Cushing, Oklahoma, has dropped by 40% since the start of the year. Crude oil inventories in the United States are approximately 7% lower than the five-year average for this time of year.
President Joe Biden has urged OPEC to boost oil production, but the organization only decided to increase supply by 400,000 barrels per day in December. Instead, according to Occidental Petroleum CEO Vicki Hollub, the US should push domestic shale producers to raise output.
According to the American Petroleum Institute, President Joe Biden’s letter to the Federal Trade Commission diverges from the energy market. “Ill-advised government choices,” according to the API, are “exacerbating” an already tricky position in the oil and gas business. The API’s senior vice president stated, “We should be encouraging the safe and prudent development of American-made oil and gas.”