Biden Questioning the Soaring Prices of Oil

Joe Biden asked federal regulators on Wednesday to investigate oil companies about their potentially illegal conduct of getting profit from higher gas prices.

Recently, oil and gas prices have spiked dramatically. This has concerned the Biden administration about the possible systematic intervention of the major stakeholders in manipulating the prices.

Biden wrote a letter to FTC to probe gasoline price hike

The president wrote a letter to the Federal Trade Commission (FTC), noting even though the overall costs of oil and gas companies are declining, the gasoline prices are soaring at an unprecedented rate.

He reminded the FTC of its authority to probe illicit conduct against entities whose behavior cost too much to the families at the point of sales.

Biden asserted he does not want Americans to pay higher prices, due to the incompetence of companies that are unable to act immediately in the crisis. The president advised the FTC to use all resources available to see if they can come to any conclusion.

Biden noted both ExxonMobil and Chevron, the two oil giants of the USA, are on the course of amplifying their income by getting involved in stock buybacks and dividends. None of the companies responded to the request for comments on Biden’s letter.

The average price of gasoline in the United States rose to $3.41 per gallon, which is $1.29 higher than the last year. However, this price is not even at all places, as these numbers went up to $4.687 per gallon in California on Tuesday.

Biden said the unexpectedly large gap between crude oil and gasoline at the pump is his reason to bother about the situation.

Oil lobbyists came to the defense of oil companies

However, Biden’s letter immediately caught oil sector stakeholders’ attention, causing them to lash out at the president. Frank Macchiarola, a high-profile official of the American Petroleum Institute, said this attempt of the president is a distraction from the shifting marketing trend.

Macchiarola also noted the ill-advised decisions of the government are fueling the fire of inflation. He then asserted the price hike is a result of the increasing demand after the economic recovery in the pandemic.

Likewise, Macchiarola added restricted fossil fuels access is one of the reasons behind the rising gas inflation. He advised the administration to encourage the development of American-made products, instead of regulating the markets being monitored by OPEC on a daily basis.

The rising gasoline prices are decreasing the political clout of Biden, which is the primary reason he started digging deeper into the issue.

Some Senate Democrats also asked Biden to ban US oil exports in order to bring prices down at home. However, economists believe it will do little to solve the persisting crisis.

On the other hand, Sen. Chuck Schumer requested Biden to utilize the strategic Petroleum Reserve to bring prices back to normal. Industry experts, however, believe doing so will not be of any favor, given the fact reserves are not very large.