As crude oil prices are dropping, President Joe Biden is demanding that gas prices be lowered to ease the impact on the public.
On Wednesday, Biden tweeted a chart showing the current discrepancy between oil price and gas price trends. “Oil prices are decreasing, gas prices should too,” Biden said. “Last time oil was $96 a barrel, gas was $3.62 a gallon. Now it’s $4.31. Oil and gas companies shouldn’t pad their profits at the expense of hardworking Americans.”
Crude oil prices have been dropping over the past week after hitting highs of over $120 a barrel in response to Russia’s invasion of Ukraine. In the past few days, they’ve dipped below $100 – but, while gas prices had climbed in tandem with rising crude oil prices, they haven’t lowered at the same pace. Instead, according to AAA, gas prices are still around $4.31 a gallon on average.
Biden is echoing progressive lawmakers’ recent cries to hold oil and gas companies accountable for jacking up prices in response to the current crisis. The fossil fuel industry is “profiteering,” Rep. Alexandria Ocasio-Cortez (D-New York) wrote on Monday. “And there should be consequences for it.”
If gas prices were to remain high, CNN reports, the average household would spend $1,300 more a year on gas, spending a collective $165 billion more on gas than consumers did in 2019. Gas prices are currently about $1.50 higher per gallon than pre-pandemic levels.
A lag between crude oil prices and gas prices is common in the oil and gas industry, experts say, and is typically called “rockets and feathers” – gas prices rocket on the way up, but fall back down like feathers.
Biden doesn’t think it should be this way.
“Try explaining how it’s just rockets and feathers to President Biden, and you’d better be ready to hear, ‘That’s a bunch of malarkey’ coming back at you,” a senior White House official said to CNN. “The president is very much within his rights to point out that if you’re going to have rockets on the way up, you need to have rockets on the way down, not feathers.”
When the Ukraine crisis first began, gas prices had already been creeping up as inflation rose and the industry padded its profits. Biden warned companies against using the crisis to raise prices. “American oil and gas companies should not exploit this moment to hike their prices to raise profits,” Biden said as Russian forces began the invasion of Ukraine.
Biden has already put oil and gas companies on notice. In November, he directed the Federal Trade Commission to investigate whether or not oil and gas companies are artificially boosting gas prices while using inflation as a cover. A recent poll found that most voters think that corporations are using the pandemic in order to increase their profits.
Republicans have been blaming Biden for the gas price increases, but in reality, Biden exercises little to no control over gas prices.
Experts say that profit-seeking is at least part of the reason that gas prices are high. Wall Street investors are insisting that dividends and profits stay high amid several ongoing crises, and high gas prices can maintain payouts for them and executives. Meanwhile, the oil and gas industry is pushing for subsidies like tax breaks as customers are fleeced at the gas station.
Last week, Democrats introduced legislation to tax barrels of oil produced or imported by large oil and gas companies in order to discourage profiteering. The revenue raised from the tax would be given back to consumers in the form of quarterly checks under the bill.