Biden Vows to Use 'Every Lever' to Lower Fuel Prices After Slamming US Oil Firms' 'Lack of Action'
14:41 GMT 17.06.2022 (Updated: 14:50 GMT 17.06.2022)
© AP Photo / Damian Dovarganes A motorist pumps gasoline at an ARCO gas station in Los Angeles, Sunday, June 12, 2022
© AP Photo / Damian Dovarganes
The White House accused oil companies of taking advantage of the Ukraine conflict to boost profits on Wednesday. Previously, President Joe Biden penned a letter to seven major US companies, urging them to ramp up their refinery capacity.
US President Joe Biden has stated that he is "using every lever available” to him in order to “bring down [fuel] prices for the American people”.
Speaking at the Major Economies Forum on Energy and Climate in Egypt on Friday, Biden added that the “critical point” of his proposal is that his actions allegedly form part of the US’ “transition to a clean and secure and long-term energy future”.
His remarks came as major US oil companies lashed out at the POTUS after he berated them for deliberately exacerbating the strain on people’s pockets. US petrol prices have hit a national average of $5 per gallon and are expected to soar higher.
Oil giants Exxon Mobil and Chevron argued that the Biden administration could have done more to tackle soaring oil prices, accusing the 46th president of “imposing obstacles” to US industry’s efforts to “deliver energy resources”.
For its part, Chevron said that it “understand[s] the significant concerns around higher fuel prices currently faced by consumers around the country, and the world” in a statement.
“We share these concerns, and expect the administration's approach to energy policy will start to better reflect the importance of addressing them”, the company stressed.
Exxon, in turn, offered some short and long term ideas for tackling surging oil prices, asserting that emergency measures “such as waivers of Jones Act provisions and some fuel specifications to increase supplies” could be used in the short term.
The Merchant Marine Act of 1920, known as the Jones Act, is a federal statute establishing support for the development and maintenance of a merchant marine in order to support commercial activity and serve as a naval auxiliary in times of war or national emergency. Many consider, however, that it limits waterway cargo in US waters.
As for the long term solutions, Exxon proposed that “streamlined regulatory approval and support for infrastructure such as pipelines” were necessary.
This came following a Biden letter to US oil firms Marathon Petroleum Corp, Valero Energy Corp, ExxonMobil, Phillips 66, Chevron, BP and Shell. In the communiqué, the US president noted that oil refineries significantly reduced their capacity during the COVID-19 pandemic, leaving refinery companies “at their lowest capacity in more than a half decade”.
Biden also argued that the industry's lack of action hampers his administration's attempts to offset the impact of the Ukraine conflict. “At a time of war, refinery profit margins well above normal being passed directly onto American families are not acceptable”, Biden wrote, adding that the lack of refining was driving up gas prices faster than oil prices in the US.
The POTUS has repeatedly blamed Russian President Vladimir Putin and his decision to launch a special operation in Ukraine on 24 February for sending international oil prices and inflation rates skyrocketing, as well as prompting a threat of nascent electricity generation shortages in the US.
Washington and its allies were quick to slap a spate of “severe” sanctions on Russia, with the US, in particular, banning all imports of Russian oil and natural gas as part of the restrictive measures. Data shows that domestic US inflation rates, however, started to surge in November 2021, well before the beginning of Russia’s special op.
Earlier this month, the POTUS declared a national emergency over the threat of power generation shortages, which the White House blamed on climate change. Biden proposed resolving the problem by temporarily lifting duties on solar panel imports, but made no mention of increasing domestic energy output or replacing the oil and gas that the US previously imported from Russia.