“The Federal Trade Commission has authority to consider whether illegal conduct is costing families at the pump. I believe you should do so immediately,” Biden wrote in a letter to FTC Chairwoman Lina Khan on Wednesday.
“Prices at the pump have continued to rise, even as refined fuel costs go down and industry profits go up,” he added. “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. This unexplained large gap between the price of unfinished gasoline and the average price at the pump is well above the pre-pandemic average.”
Biden said that oil and gas companies in the U.S. are generating significant profits from the higher cost of energy, noting that two of the largest oil and gas companies in the U.S. are on track to nearly double their net income over 2019.
“They have announced plans to engage in billions of dollars of stock buybacks and dividends this year or next,” he wrote.
Gas prices rose 6.1 percent in October, according to the Labor Department, with prices about 24 percent higher than they were during the same month in 2019.
“The bottom line is this: gasoline prices at the pump remain high, even though oil and gas companies’ costs are declining,” the president wrote.
Biden has caught flak from Republicans over gas prices, which are rising ahead of the holiday season, when Thanksgiving travel is expected to return to near pre-pandemic levels. Republicans have focused on the issue especially heading into next year’s midterm elections.
Still, many of the factors impacting gasoline prices — such as global oil production — are out of a president’s control. Currently, a group of oil-producing countries and their allies, known as OPEC+, are steadily increasing their oil production, though the U.S. has urged them to do so more rapidly.
In August, Biden urged OPEC+ to boost oil output as a way to combat rising gas prices and national security adviser Jake Sullivan at the time was critical of big drilling countries for their insufficient crude production during the global recovery from the COVID-19 pandemic.
Majority Leader Charles Schumer (D-N.Y.) on Sunday pushed for the president to tap into emergency petroleum reserves, the Strategic Petroleum Reserve (SPR), as a way to lower gas prices. His comments follow a letter several Senate Democrats sent Biden earlier this month, urging him to tap the SPR and ban crude exports.
Energy Secretary Jennifer Granholm has said that Biden is considering the SPR as an option, telling CNN earlier this month that Biden was “looking at all of the tools that he has.” The White House has also stressed that there are limitations to what a president can do about gas prices.
Meanwhile, a major industry group hit back at Biden on Wednesday, arguing that his policies are making the situation worse.
“This is a distraction from the fundamental market shift that is taking place and the ill-advised government decisions that are exacerbating this challenging situation,” said Frank Macchiarola, senior vice president of policy, economics and regulatory affairs at the American Petroleum Institute.
“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,” Macchiarola said.
But it’s not just the U.S. facing fuel supply issues. Countries around the world are dealing with high prices and a supply crunch.
Biden has asked Khan to look into the issue before, previously asking for a probe into “divergences” between oil prices and gasoline costs.
Khan agreed to undertake that investigation, saying regulators will look into whether there are any “collusive” or otherwise illegal practices impacting gas prices.
— Sylvan Lane contributed to this report.