In a letter to seven large energy firms, the president said excessive margins were “worsening that pain” for American consumers.
This article is part of our Daily Business Briefing
The average price of gas in the United States is topping $5 per gallon.Credit…John Taggart for The New York Times
- June 15, 2022, 10:50 a.m. ET
WASHINGTON — President Biden chastised some of the largest oil companies for profiteering off surging energy prices and “worsening that pain” for consumers, as he increased the pressure on them to boost refining capacity to bring down costs at the pump for millions of Americans.
With the average price of gas in the United States topping $5 a gallon for the first time, Mr. Biden pointed the finger at energy firms in a letter to seven top executives dated Tuesday, demanding that they explain their decision to limit refining capacity and announcing that his administration would hold an “emergency meeting” to discuss ways of stemming the crisis.
“At a time of war, refinery profit margins well above normal being passed directly onto American families are not acceptable,” Mr. Biden said in the three-page letter. “There is no question that Vladimir Putin is principally responsible for the intense financial pain the American people and their families are bearing. But amid a war that has raised gasoline prices more than $1.70 per gallon, historically high refinery profit margins are worsening that pain.”
The letter, which went to executives at BP, Chevron, Exxon Mobil, Marathon Petroleum, Phillips 66, Shell and Valero Energy, extends an effort by the president in recent weeks to pin at least some of the blame for high gas prices on firms raking in billions of dollars of profit while deflecting any responsibility from his administration. Rising gas prices have contributed to a sour political environment that has seen Mr. Biden’s approval ratings slide lower in advance of the fall midterm election campaign.
The president argued in the letter that the companies have failed to restore refining capacity that they reduced during earlier days of the coronavirus pandemic. At the same time, it said that there is “an unprecedented disconnect between the price of oil and the price of gas,” noting that the last time the price of crude hit $120 a barrel in March, the price of gas at the pump was $4.25. But today, gas prices are 75 cents higher.
“That difference — of more than 15 percent at the pump — is the result of the historically high profit margins for refining oil into gasoline, diesel and other refined products,” Mr. Biden said. “Since the beginning of the year, refiners’ margins for refining gasoline and diesel have tripled, and are currently at their highest levels ever recorded.”
House Democrats passed a bill last month empowering Mr. Biden to declare an energy emergency and crack down on firms deemed to be excessively increasing prices, but it appears unlikely to pass the Senate. Republicans have maintained that Mr. Biden’s energy and climate policies are at least partly to blame for the rising gas prices, accusing the president of undermining America’s energy industry.
