Biden is asking oil firms to clarify fuel shortages as costs rise

Gas prices above the $6.00 mark are advertised at a 76 station in Santa Monica, California, USA on May 26, 2022. REUTERS/Lucy Nicholson

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WASHINGTON, June 15 (Reuters) – US President Joe Biden on Wednesday urged oil companies to explain why they are not putting more gasoline on the market, sharply escalating his rhetoric against the industry as he comes under pressure over rising prices stands.

Biden wrote to executives at Marathon Petroleum Corp, (MPC.N), Valero Energy Corp, (VLO.N) and Exxon Mobil Corp (XOM.N), complaining that they had scaled back oil refining to keep their profits, according to one copy to correct the letter seen by Reuters.

“In times of war, refinery profit margins that are well above normal and passed directly to American families are unacceptable,” Biden wrote, adding that the shortage of refineries drove gas prices up faster than oil prices.

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“The lack of refining capacity — and the resulting unprecedented refining profit margins — are mitigating the impact of the historic measures my administration took to address Vladimir Putin’s price hike and driving up costs for consumers.”

The letter is also sent to Phillips 66, (PSX.N) Chevron Corp, (CVX.N) BP (BP.L) and Shell (SHEL.L), a White House official who declined to be identified, said Reuters.

Biden has ramped up attacks on oil companies in recent days as U.S. gas prices rocketed to record highs of over $5 a gallon last weekend and the start of the summer driving season. Continue reading

Soaring gas prices have fueled unexpectedly prolonged consumer price inflation and voter frenzy ahead of the Nov. 8 midterm elections, in which Biden’s Democratic Party will defend its control of Congress.

US consumer inflation unexpectedly accelerated in May, leading to the largest annual increase in four decades. White House officials have heatedly debated how to respond to an issue they once thought was going away and now see as largely out of their control. Continue reading

Biden has primarily attributed soaring oil prices to US-led sanctions that pulled Russian energy supplies off the global market after invading Ukraine.

But in recent days, Biden has taken the fight to big oil companies that are riding soaring energy prices to record profits.

The president, who took office with a promise to reduce America’s dependence on fossil fuels, now wants to accelerate oil production, which is expected to reach record highs in the United States next year.

“Exxon made more money than God this year,” Biden said last week. Exxon made $5.48 billion in the quarter ended March 31, double the year-ago figure, and told investors to expect strong earnings into next year. Continue reading

US Energy Secretary Jennifer Granholm plans to hold an emergency meeting on how refiners can respond to higher prices, Biden said, before asking oil companies for a response.

He said they should provide “concrete ideas” to increase oil refining, along with an explanation of why they may have reduced that capacity over the past two years.

“We’re at loggerheads,” Granholm said in an interview with MSNBC. “Oil and gas prices are fueling the high cost and high percentage of inflation around the world. And that’s why he’s urging our domestic and international producers to produce more.”

“We’re not against profit,” Granholm said, but added that a 225 percent year-on-year increase in profit means something else is going on.

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Reporting by Trevor Hunnicutt; Edited by Chizu Nomiyama

Our standards: The Thomson Reuters Trust Principles.

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