With Americans complaining about high gas prices, President Joe Biden went on the offensive Wednesday, shaming oil companies, calling out Republicans for claiming production has been thwarted by the administration, and casting the crisis as a test of American patriotism and determination to stop a dictator.
Formally announcing a proposal to suspend the federal gas tax for 90 days, Biden blamed much of the gas price hike on Russian leader Vladimir Putin’s invasion of Ukraine, and the attending supply and global market forces that increased costs.
But in stark language, the president also held oil companies accountable, saying they are making record profits while failing to use already-approved oil drilling leases and refusing to pass on to consumers the savings from recent drops in the world price per barrel of oil.
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“This is not the time for profiteering,” Biden said in remarks at the White House.
“To the companies running gas stations and setting those prices at the pump, this is a time of war, global peril, Ukraine – this is not normal times. Bring down the price you are charging at the pump to reflect the price you are paying for the product. Do it now. Do it today. Your customers, the American people, they need relief now,” he said.
Average gasoline prices recently dipped below $5 a gallon, according to AAA, but they remain high, adding to the price tag of not only commuting and leisure travel costs but the price of goods being transported around the nation.
The stubbornly high prices have been an ongoing source of frustration for the Biden administration and congressional Democrats. While fundamental sectors of the economy are strong – job creation is at record high levels at this stage of a presidency, personal savings are up, unemployment is low and the deficit is dropping at historic levels – high inflation and eye-popping gas prices are obliterating those gains and causing political troubles for Democrats ahead of the midterms.
While Biden’s power to influence gas prices is limited, his announcement Thursday was a pointed effort to convince Americans he is trying to do something – even if his ideas go nowhere on Capitol Hill.
The pandemic is also a driver of high prices, Biden said, since some oil-refining facilities were shut down during lockdowns and it’s not easy to get them up and running again. But he said oil companies still weren’t doing their part.
Instead of using high profits to drill more, the companies are letting their 9,000-plus federal drilling permits sit idle while using cash to buy back stock, the president said.
He acknowledged that a gas tax holiday would not solve the fundamental problem but said it would at least provide some “breathing room” for consumers as the United States and its allies try to get Putin to give up on his efforts to take over Ukraine.
The president has also released oil from the Strategic Petroleum Reserve and worked with foreign nations to release oil from their reserves as well, increasing global supply.
“I’m doing my part,” Biden said. “I want the Congress, the states and the industry to do their part as well.” He called on states to suspend their per-gallon gas taxes as well.
Energy Secretary Jennifer Granholm and other administration members will be meeting Thursday with energy company executives.
A miffed Chevron CEO Michael Wirth published a letter this week to Biden, saying the oil company “shares your concerns over the high prices that Americans are experiencing,” but wants the administration to show more “clarity and consistency” on energy policy.
“Most importantly, we need an honest dialogue on how to best balance energy, economic, and environmental objectives – one that recognizes our industry is a vital sector of the U.S. economy and is essential to our national security,” Wirth wrote.
Energy industry officials complain that the administration is sending mixed signals – accusing them of lagging on production but also making it clear they want the U.S. to move away from fossil fuels.
Biden on Wednesday noted that production is already at higher levels than they were during his predecessor and are on track to increase more next year. He said the companies could produce more oil without undermining electric cars and other such approaches to reduce carbon emissions.
The chances of Biden’s gas tax holiday passing Congress are uncertain at best. House Majority Leader Steny Hoyer, Maryland Democrat, told reporters Wednesday that he didn’t know if there were enough votes to pass it in the House and that some aren’t convinced that the tax break will be passed onto consumers.
“We will see where the consensus lies on a path forward for the president’s proposal in the House and the Senate,” House Speaker Nancy Pelosi, California Democrat, told reporters Wednesday.
Biden said he understood the angst over high gas prices but that it was the cost of stopping a “menacing dictator” in Putin.
“So, for all those Republicans in Congress criticizing me today for high gas prices in America, are you now saying we were wrong to support Ukraine? Are you saying we were wrong to stand up to Putin? Are you saying that we would rather have lower gas prices in America and Putin’s iron fist in Europe? I don’t believe that,” Biden said.
Had the U.S. and allies not banned Russian oil and put sanctions on its financial system, “Putin wouldn’t have stopped. Putin would have kept going and we would have faced an even bigger price,” Biden said.