Biden Pressures Oil Companies – Increase Production but Cut Profits

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Source: Gage Skidmore | commons.wikimedia.org

President Joe Biden sent a letter to multiple oil companies on Wednesday, urging them to up gasoline production as the prices at the pump continue to shatter one record high after another.

The letter obtained by AXIOS indicated that the Administration was prepared to use its “emergency powers” to force oil companies to increase refinery production.

The letter also reiterated Biden’s claim that Vladimir Putin was to blame for the bulk of the $5.00 per gallon gas prices.

“There is no question that Vladimir Putin is principally responsible for the intense financial pain the American people and their families are bearing,” Biden wrote. “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 went to the heads of ExxonMobil, Chevron, BP America, Shell USA, Phillips 66, Marathon and Valero. Biden urged the oil companies that they needed “to work with” his Administration.

Bryon York, the chief political correspondent for the Washington Examiner, tweeted, “In a letter to Exxon CEO, Biden twists himself up trying to cast blame for high gas prices. He’s been blaming ‘Putin’s price hike’ for months, but now wants to blame oil companies, too. So, he adjusts the story…”

The @SquawkCNBC tweeted, “Joe Biden owns this inflation,” says Sam Zell on President Biden’s letter to energy companies. “Blaming oil companies this week doesn’t avoid the reality that the real blame here is policy or lack thereof.”

According to the U.S. Energy Information Administration (EIA), in January 2020, production stood at 18,976 barrels of crude per day. However, by March 2022, production had dropped to 17,944, a difference of 1,032 barrels. The EIA explained how many gallons of gasoline and diesel fuel comes from one 42-gallon barrel of crude – 19 to 20 gallons of gas and 11 to 12 gallons of diesel. So, the fuel deficit since gas was in the $2.00 range is approximately 20,000 gallons of gas and 12,000 gallons of diesel per day.

According to the EIA, on November 2, 2020, a gallon of gas cost $2.11. The price increase began by the end of the month and has steadily risen since the Biden administration took office.