President Joe Biden sent a letter to the Federal Trade Commission on Wednesday, urging its chair to investigate “whether illegal conduct” by oil-and-gas companies “is costing families at the pump.”
Biden noted an “unexplained large gap between the price of unfinished gasoline and the average price” passed along to consumers and suggested that “mounting evidence of anti-consumer behavior” might be to blame.
“Usually, prices at the pump correspond to movements in the price of unfinished gasoline, which is the main ingredient in the gas people buy at the gas station,” wrote Biden. “But in the last month, the price of unfinished gasoline is down more than 5 percent while gas prices at the pump are up 3 percent in that same period.”
Biden highlighted that America’s “two largest oil companies” – Exxon and Chevron – are on pace to double their 2019 net income.
“The bottom line is this: gasoline prices at the pump remain high, even though oil and gas companies’ costs are declining,” Biden said in the letter, requesting that FTC chair Lina Khan open an inquiry “immediately.”
CNBC provides key context:
Biden’s latest request comes as the administration tries to quell the surge in gas prices and its contribution to inflation across the economy. In August the administration called on OPEC and its oil-producing allies to boost output and also asked the FTC to investigate price-gouging at the pump.
The administration has repeatedly said that it’s examining the tools at its disposal to alleviate some of the burden on consumers, which could include tapping the Strategic Petroleum Reserve.
NBC News adds:
After surpassing $3 a gallon for the first time in more than half a decade in the spring, the average cost of a gallon has steadily trickled up. Experts say there are multiple factors for the increase, from pandemic-related supply issues to Hurricane Ida, and are forecasting that energy prices will continue to rise in the coming months.
The average gallon of gas was almost $3.40 in the U.S. Monday, according to Energy Information Administration.
The American Petroleum Institute, the industry’s top lobbying group, called Biden’s letter a “distraction from the fundamental market shift that is taking place,” noting that an increase in demand has lifted prices.
“Rather than launching investigations on markets that are regulated and closely monitored on a daily basis or pleading with OPEC to increase supply, we should be encouraging the safe and responsible development of American-made oil and natural gas,” the group said in a statement.
