Can President Biden Lower Gas Prices?
Unites States gas prices are at a seven-year high. One gallon of regular octane gas costs nearly $3.40, on average. This number has not been over $3.32 since 2014. Many Americans are concerned about fuel economy and their budget. President Biden has made several attempts to negotiate lower prices. That said, the President does not have the authority to force these prices down.
President Biden is investigating the high gasoline prices
Because of the low U.S. gas tax, Americans are used to paying less than Europeans or Canadians for fuel. Adding corn-based ethanol to our gasoline drops the prices even further. But over Thanksgiving weekend, gas prices shot through the roof. Some stations in California charged as much as $5.89 for a gallon of regular gas, $6.49 for super.
The oil companies claim that when demand dropped during the COVID-19 quarantine, they reduced production. Then, demand increased as we resumed commuting and holiday travel. With such a low supply, prices naturally increased. But President Biden is not ready to accept this explanation.
The American Automobile Association predicted 53 million Americans would travel for Thanksgiving in 2021, over 90% of them driving. Despite this forecast, the oil industry was not ready. This scarcity led to increased profit.
For this reason, President Biden called on the Federal Trade Commission to investigate. He asked the FTC to look into whether the industry took advantage of holiday travel to mark up prices.
“I do not accept hard-working Americans paying more for gas because of anti-competitive or otherwise potentially illegal conduct.”President Joseph Biden
Gasoline production takes a long time to increase
According to The Daily Show, the United States’ gasoline production capability is diminished. During the quarantine, the price of gas fell. With the prices low, the oil industry did not bother to drill new wells. In addition, it did not invest in maintaining aging refineries or opening new ones. The result is that the country simply cannot produce as much gasoline as it could in 2019.
What is more, the infrastructure required to produce gasoline takes time to build. This situation might have been preventable. Perhaps the government could have offered an incentive for the industry to maintain infrastructure during the quarantine. But now, there is not much that President Biden can do to speed up fuel production in the short term.
President Biden has been unable to secure additional gasoline from other countries
President Biden appealed to Russia and the Organization of the Petroleum Exporting Countries (OPEC) to boost their production. His goal was to increase the United States’ fuel supply and lower prices at the pump.
These foreign, oil-producing countries told Biden “no.” The OPEC alliance, which is led by Saudi Arabia said that if the US wants more oil, we can increase our own production.
If you are concerned about rising fuel prices, you can read up on how gasoline taxes stack up by state. If you choose to stock up on fuel, remember that gasoline has a short shelf life, and make sure to use a safe gasoline storage container.