- President Joe Biden is asking the Federal Trade Commission to look into the behavior of energy companies as gas prices near a seven-year high.
- “There is mounting evidence of anti-consumer behavior by oil and gas companies,” the president said in a letter to the FTC.
- In August the administration called on OPEC to boost production, while also asking the FTC to monitor and detect any illegal conduct at the pump.
- On Wednesday, the national average for a gallon of gas was $3.41, according to AAA data.
President Joe Biden is asking the Federal Trade Commission to look into the behavior of energy companies as prices at the pump near a seven-year high.
In a letter to Speaker Lena Khan on Wednesday, Biden said there is “growing evidence of anti-consumer behavior by oil and gas companies.” The letter said that despite the fall in the price of unfinished petrol, the prices at the pumps remained high. “This unexplained large gap between the price of unfinished gasoline and the average price at the pump is well above the pre-pandemic average,” the letter said.
The letter said that “the two largest oil and gas companies in the United States” – which are Exxon and Chevron based on market capitalization – are on track to nearly double their net income compared to 2019 levels, while both companies Stock has also been announced. repurchases and dividend growth.
Biden’s latest request comes as the administration tries to stem the rise in gas prices and its contribution to inflation in the economy. In August, the administration called on OPEC and its oil-producing allies to ramp up production and also asked the FTC to investigate pump pricing.
The administration has repeatedly said it is examining equipment at its disposal to ease some of the burden on consumers, which could include exploiting strategic petroleum reserves.
On Wednesday, the national average for a gallon of gas was $3.41, according to AAA data. This is up from $3.31 a month ago and $2.12 a year ago.
West Texas Intermediate crude futures, the US oil benchmark, rose to a seven-year high from $85 in October as gas prices jumped. The blistering rally came as pandemic demand for petroleum products on record for the first time since the contract plunged into negative territory in April 2020.
OPEC+ made an unprecedented decision in April 2020 to remove nearly 10 million barrels per day from the market in an effort to support prices, while US producers also cut production.
These supply cuts, coupled with improved demand, have pushed oil prices to levels that were seen well before the pandemic struck.
The American Petroleum Institute called Wednesday’s letter to the FTC a “distraction from fundamental market shifts” as economics from the pandemic loomed. The industry group said in a statement that “wrong decisions of the government” are adding to this challenging situation.
“Instead of launching investigations on markets that are regulated and closely monitored on a daily basis or requesting OPEC to increase supplies, we need to provide safe and responsible access to American-made oil and natural gas,” said API senior Frank Macchiarola. development should be encouraged.” Vice President of Policy, Economics and Regulatory Affairs.