President Biden called on US oil refiners to manufacture more petrol and diesel on Wednesday, stating that profits had tripled during the war between Russia and Ukraine while Americans faced record-high gas prices. Biden stated in a note to the oil refiners acquired by Associated Press, “It is not appropriate in a time of war, for refinery profit margins significantly above average, to be passed directly on to American households,” adding that the absence of refining was driving petrol prices up faster than oil costs. Your businesses must collaborate with the administration to develop clear, relatively close answers to the situation.
The average gas price in the United States is $5 per gallon. This is a financial burden on the Americans and a political threat to the president’s fellow Democrats heading to the midterm election. Inflation, in general, began to rise in the United States last year after the recovery from the pandemic. However, it has accelerated in recent months due to growing food and energy prices following the invasion of Ukraine in February. When oil was close to the price of t $120 a barrel in the first quarter, gas prices averaged $4.25 a gallon. The 75-cent shift in average gas prices in only a few months reviews a refinery capacity shortfall and profit margins. Consumer inflation in the United States suddenly increased in May, resulting in the highest annual gain in four decades. During a worldwide crisis that might potentially drag Europe and other parts of the world into recession, the president has vigorously attacked what he sees as profit.
Biden believes that refineries profit from the uncertainty created by “a war period.” Although many economists have criticized the message, it may resonate with voters.
Some lawmakers propose to crack down on corporate profits in the face of higher inflation. In March, Sen. Bernie Sanders proposed a tax of 95% for profits above the before pandemic averages of companies.
Widening inflation began to grow last year as the US economy recovered from the coronavirus outbreak. Still, it has increased in recent months as oil and food prices have risen due to Russia’s invasion of Ukraine, which affected global commodities markets.
Biden stated that Vladimir Putin, who started the war, is the primary reason for the financial pain of American families. The gasoline prices hike by $1.70 per gallon, and large refinery profit margins worsen the pain.
The president will send a note to Valero Energy, Marathon Petroleum, ExxonMobil, and Phillips 66.
President has also told Jennifer Granholm, Energy Secretary, to hold an emergency meeting with the NPC called National Petroleum Council. This is a federal advisory committee that is a part of the energy sector).
Biden requests each corporation to describe to Granholm any reduction in refining volume since the outbreak began in 2020. He also likes the enterprises to provide “any suitable solutions” for addressing “urgent price, inventory, and refining capacity challenges in the upcoming months, including transportation methods to bring the refined product to the market.
Note written by Biden stated that The administration is prepared to employ all reasonable and acceptable Federal Government tools and emergency authority in the near term to boost refinery capacity and production and to assure that every part of this country is adequately supplied. Biden has previously released oil from the US strategic reserve and raised ethanol blending regulations. However, neither step has had a long-term impact on pricing, according to the report.
The US Energy Administration predicted on Friday that It’s possible that the amount of additional capacity that can be added is limited. Refinery usage will hit a monthly level of 96 percent twice, reaching the higher limits refiners can continuously maintain.
