- As gas prices stay at a seven-year high, President Joe Biden has asked the Federal Trade Commission to investigate energy companies’ actions.
- In a letter to the FTC, the president stated that there is “growing evidence of anti-consumer activity by oil and gas businesses.”
- In August, the administration asked OPEC to increase output while simultaneously requesting the Federal Trade Commission to monitor and address any illicit pumping behavior.
- According to AAA data, the national average for a gallon of petrol was $3.41 on Wednesday.
Studying the Energy Companies’ behavior
As gas prices stay at a seven-year high, President Joe Biden has asked the Federal Trade Commission to investigate energy companies’ actions.
Biden said there’s “growing evidence of anti-consumer activity by oil and gas businesses” in a letter to Chair Lina Khan on Wednesday. Despite a drop in the price of unfinished gasoline, the letter stated that pump prices have remained high. The letter stated, “This inexplicable significant difference between the price of unfinished gasoline and the average pump price is substantially above the pre-pandemic average.”
Mentions in the Letter
“The two prominent oil and gas companies in the U.S., namely Exxon and Chevron, are on pace,” continued the letter. They have nearly doubled their net income compared to the same period last year, and both firms have announced stock buybacks and dividend increases.
Biden’s latest proposal comes as the administration works to contain the rise in gas costs and its impact on overall inflation. In August, the administration urged OPEC and its oil-producing allies to increase supply and requested the Federal Trade Commission to look into price gouging at the pump.
The administration has stated repeatedly that it is reviewing all options available to relieve some of the load on consumers, including tapping the Strategic Petroleum Reserve.
According to AAA data, the national average for a gallon of gas was $3.41 on Wednesday. This compares to $3.31 a month ago and $2.12 a year ago.
The increase in gas prices comes after the U.S. oil benchmark, West Texas Intermediate crude futures, touched a seven-year high above $85 in October. The explosive rally comes after the contract fell into negative territory for the first time in history in April 2020, as the epidemic slashed demand for petroleum goods.
In April 2020, OPEC+ took the unusual step of removing roughly 10 million barrels per day from the market to support prices, while US producers also reduced output.
These supply restrictions, along with an increase in demand, have pushed oil prices to levels not seen since before the pandemic.