Who’s To Blame for High Gas Prices? - National Motorists Association (2022)

By Lauren Fix, The Car Coach

Gas and diesel prices have reached an all-time high. US gas prices have hit an average of over $5 per gallon, according to AAA.These high gas prices hurt every citizen and are no more than an additional tax we all pay at the pump.

Who is to blame for these crazy prices?

No, it is NOT greedy oil companies. So whose fault is it?

Americans are having to spend more of their hard-earned and inflation-diminished money on energy.

(Video) Analysis: Is Biden to blame for rising gas prices?

Our government is asking producers to defy the logic behind supply and demand and economics. President Biden scolded oil manufacturers saying that Vladimir Putin’s War on Ukraine hiked prices. This makes no sense as leaders in other countries cannot affect the cost of fuel in the USA, especially if we can produce our own oil production. This simply doesn’t make sense.

But there is more to this than what’s on the surface.

This week, President Biden sent letters to seven major oil companies, saying he would “take action” if they didn’t boost fuel output from their domestic refineries. He stated, “I understand that many factors contributed to the business decisions to reduce refinery capacity, which occurred before I took office. But at a time of war, refinery profit margins well above normal being passed directly onto American families are not acceptable.”

The response from the American Fuel & Petrochemical Manufacturers (AFPM) President and CEO Chet Thompson said, “We are surprised and disappointed by the President’s letter, any suggestion that US refiners are not doing our part to bring stability to the market is false.”

In the president’s letter, Biden warned the leaders of seven major U.S. oil producers and refiners — ExxonMobil, Chevron, BP America, Shell USA, Phillips 66, Marathon, and Valero—that he was “prepared to use all reasonable and appropriate federal government tools and emergency authorities” to increase petroleum refinery capacity and output. This sounds like the government wants to inflict price controls on the oil and gas industry as many will recall from the Carter Administration. It was a disaster and cost consumers even more than before the price controls.

It’s important to know that US refining capacity utilization surged to 91.3 percent in March, its highest rate since June 2021, and is expected to average 94 percent between July-September, according to a June 7 report from the Energy Information Administration (EIA). Refining utilization measures how much fuel refiners produce from crude oil inputs relative to their total production capacity.

(Video) Blame Biden for High Gas Prices

The oil industry is producing at capacity and continues to explore options that would have the result in delivering additional energy products to customers in the US and abroad.

John Kerry’s solution of increasing the cost of oil does not lower the price of gas at the pumps. Period. It will blow up the price of oil and gas. Would you be surprised to know that before Biden’s election, the Exxon-Mobil company had publicly announced plans for billions of investments to increase its refining capacity in the US? It did. Then only days later, another attack on the oil industry by the administration caused Exxon-Mobil to rethink that investment, as would any business that finds they’ve been targeted by Washington.

The Biden strategy against the oil industry should surprise no one, though. He ran on shutting it down and has pledged to do everything in DC’s power to eviscerate the fossil fuel industry.

Why do such a thing if there wasn’t an agenda that goes along with such an attack—especially when our nation’s infrastructure and energy production capacity is nowhere near where it needs to be to effect anything approaching meaningful impact on the environment.

We have seen shutdowns, bio refiners, and US policy that has punished refiners to produce. This does not promote any company to produce more oil.

It’s not big oil. The price of oil and gas has increased and impacted inflation. Prices are not going up simply because of greed. Increased costs for manufacturing, supply chain, and employee salaries are passed along to consumers. No company can survive at a loss, and they can’t make it up over time. Increasing the volume at a loss will never work, either.

The oil and gas industry kept investing even during the pandemic, when they lost more than $20 billion and had to borrow more than $30 billion to maintain investment to increase capacity to be ready for post-pandemic demand. US refineries are running at a record high utilization rate and expanding refinery capacity is a long-term proposition, not a short-term fix. Any suggestion that the US refiners are not doing their part to bring stability to the market is patently false.

(Video) Verify: What's to blame for high gas prices?

Here’s who stands to win from high gas prices. Saudi Arabia and the United Arab Emirates could benefit from the price spike if they decide to put more oil on the market. Saudi Arabia usually has 1.5 million to 2 million barrels of oil per day of “spare capacity”–or barrels that can be quickly moved onto the market and sustained for a period of time. The UAE also has spare capacity. This is now the oil that our president is going to beg for from the Saudis, while the potential for US oil and gas production makes Saudi Arabia look like a pond, not an ocean.

The Bottom Line
Here is one of many positive solutions to lower gas prices. Shale oil producers are particularly well-suited to benefit from high gas prices given the relatively quick turnaround for extracting this type of oil.

Shale is a type of rock that can be found in Colorado, Utah, Wyoming, and other states that contains oil and gas. Producers often use hydraulic fracking to develop these fuels. The process of extracting shale usually takes less time than extracting conventional oil, meaning that shale producers can more easily ramp up production in response to the high prices. The shale producers so far have been hesitant to ramp up production because of environmental attacks on that process, as well. It’s interesting to note that since its first use in the late 1940s, not a single groundwater contamination has occurred from this technique, but it doesn’t matter to the environmental left who will stop at nothing to put any technique in their crosshairs.

Buying from Canada is an answer that would lower gas prices. Canada continues to offer to sell to us. The current government won’t talk to them. This makes no sense and we are all paying the price, let’s open this conversation.

The federal government should promote investment through “a clear and consistent policy” such as streamlining the regulatory approval process for fossil fuel infrastructure and holding regular oil and gas lease sales. The industry needs to know beyond a 2- or 4-year horizon what our nation’s energy policy will be in order to make the vast investments we will need to meet demand.

So who is to blame for high gas prices?

The administration’s misguided policy agenda shifted away from domestic oil and natural gas from day one and has been compounded by inflationary pressures. Government policy has impacted gas prices and has hurt Americans and our economy.

(Video) Gas prices are climbing, AAA says crude oil is to blame

The government wants price controls. That’s been the goal all along. Control the price–Control the access–Control the supply. Prices will continue to go up just as they did under the Carter administration. Watch gas prices go higher.

There is so much more to discuss on this, put your comments below and let’s start the conversation.

Lauren is the CEO of Automotive Aspects and the Editor-in-Chief of Car Coach Reports, a global automotive news outlet. She is an automotive contributor to national and local television news shows, including Fox News, Fox Business, CNN International, The Weather Channel, Inside Edition, Local Now News, Community Digital News, and more. Lauren also co-hosts a regular show onABC.comwith Paul Brian called “His Turn – Her Turn” and hosts regular radio segments on USA Radio – DayBreak.

Lauren is honored to be inducted into the Women’s Transportation Hall of Fame and a Board Member ofthe Buffalo Motorcar Museum and Juror / President for the North American Car, Utility & Truck of the Year Awards.

Check her out on Twitter and Instagram @LaurenFix.

Editor’s Note: The opinions expressed in this article are those of the author.

FAQs

Who controls the price of gasoline? ›

Five Fast Facts About U.S. Gasoline Prices. Petroleum prices are determined by market forces of supply and demand, not individual companies, and the price of crude oil is the primary determinant of the price we pay at the pump.

What is the biggest influence on gas prices? ›

The cost of crude oil is the largest component of the retail price of gasoline, and the cost of crude oil as a share of the retail gasoline price varies over time and across regions of the country.

Who controls the price of oil today? ›

The price of oil fluctuates according to three main factors: current supply, future supply, and expected global demand. Members of OPEC control 40% of the world's oil.

Why are California gas prices so high? ›

One of the biggest factors affecting that steep price tag is California's state excise gas tax. Data from the American Petroleum Institute shows Californians pay more than 68 cents per gallon between the state excise tax and other state fees and taxes, more than any other state.

Does the federal government control the price of gas? ›

It's that they have very little control over it. Yes, policies and legislation can certainly play a role, but gas prices are largely dictated by oil prices and oil prices are dependent upon supply and demand.

How do gas stations know to change prices? ›

The U.S. EIA website states: "Gasoline prices can change rapidly if something disrupts crude oil supplies, refinery operations, or gasoline pipeline deliveries. Even when crude oil prices are stable, gasoline prices fluctuate because of seasonal changes in demand and in gasoline specifications."

Does OPEC control gas prices? ›

Gas prices are largely controlled by OPEC, or the Organization of the Petroleum Exporting Countries, an organization that includes Algeria, Angola, Ecuador, Iran, Iraq, Kuwait, Libya, Nigeria, Qatar, Saudi Arabia, the United Arab Emirates, and Venezuela. Saudi Arabia was an original member of OPEC.

Does OPEC set oil prices? ›

OPEC doesn't have direct influence over American oil, but since the oil price is set by the global market and OPEC members produce about 40 percent of the world's crude oil, and export over 60 percent of total petroleum traded internationally, its policies indirectly affect prices in the U.S.

How are gas prices set in Canada? ›

What makes up the price of a litre of Shell gasoline? Four costs go into Shell's pump price: crude oil, taxes, refiner margin, and marketing margin. Gasoline prices go up and down over time and vary from place to place, so the price breakdown for a litre of gasoline also varies.

Why do gas prices change daily? ›

Because crude oil is the main ingredient in gasoline, changes in crude oil prices are reflected in changes in gasoline prices.

US gas prices have hit an average of over $5 per gallon, according to AAA.These high gas prices hurt every citizen and are no more than an additional tax we all pay at the pump.. In the president’s letter, Biden warned the leaders of seven major U.S. oil producers and refiners — ExxonMobil, Chevron, BP America, Shell USA, Phillips 66, Marathon, and Valero—that he was “prepared to use all reasonable and appropriate federal government tools and emergency authorities” to increase petroleum refinery capacity and output.. This sounds like the government wants to inflict price controls on the oil and gas industry as many will recall from the Carter Administration.. John Kerry’s solution of increasing the cost of oil does not lower the price of gas at the pumps.. It will blow up the price of oil and gas.. The price of oil and gas has increased and impacted inflation.. The oil and gas industry kept investing even during the pandemic, when they lost more than $20 billion and had to borrow more than $30 billion to maintain investment to increase capacity to be ready for post-pandemic demand.. This is now the oil that our president is going to beg for from the Saudis, while the potential for US oil and gas production makes Saudi Arabia look like a pond, not an ocean.. Shale oil producers are particularly well-suited to benefit from high gas prices given the relatively quick turnaround for extracting this type of oil.. The process of extracting shale usually takes less time than extracting conventional oil, meaning that shale producers can more easily ramp up production in response to the high prices.

One expert estimated the impact of the Iran deal on gasoline prices at “maybe 3 to 5 cents per gallon.”. “According to energy analysts and experts, President Trump’s reckless decision to pull out of the Iran deal has led to higher oil prices,” Schumer said .. We asked Schumer’s office for backup for the claim that the decision to back out of the Iran deal “has led to higher oil prices … translating directly to soaring gas prices.” Schumer’s office pointed to several statements from industry experts immediately before and after Trump announced his decision on May 8 to pull out of the Iran deal.. Gasoline prices were rising steadily long before Trump announced his decision to walk away from the Iran deal.. Energy Information Administration, May 8 : For the 2018 April–September summer driving season, EIA forecasts U.S. regular gasoline retail prices to average $2.90/gallon (gal), 17 cents/gal higher than in last month’s STEO and up from an average of $2.41/gal last summer.. The higher forecast gasoline prices are primarily the result of higher forecast crude oil prices.. Indeed, Trump often blamed Obama for rising gasoline prices.. “Gas prices are at crazy levels–fire Obama!” Trump tweeted on Oct. 22, 2012, when the national average for regular gas was $3.69 a gallon.. "President Trump’s reckless decision to pull out of the Iran deal has led to higher oil prices.

The price per gallon remained at levels above $3 for nearly 4 years in the wake of the great recession from December 2010 to November 2014.. Patrick De Haan, head of petroleum analysis at GasBuddy, a website that tracks the price of gas, also suggested the rising gas prices are due to a recent increase in demand following the decrease caused by the pandemic, not any policy changes by the President.. "This is not a political issue.. It's more of a Covid-19 challenge simply because of how Covid-19 decimated fuel demand last year," De Haan told CNN.. More Americans are getting out, gasoline demand has soared from a year ago.". According to De Haan, while that's not entirely accurate, the difference is not large.. Gas prices aren't something presidents typically have much direct sway over.. As the EIA notes, the price of gas is determined by four major factors: taxes, the cost of marketing and distribution, refining, and the cost of crude oil.. Similar to the economy, which presidents try to take credit for when it's doing well or pass the blame to their predecessors when it's performing poorly, any attempt to pin the price increase of gas solely on Biden is not only incorrect but ignores the complexities of the oil and gas sector.. While Biden's climate change policy proposals could affect future gas production in the US, according to an EIA forecast published on June 15, there are several global variables at play that will affect the price of oil and gas beyond the control of the US President -- including how much crude oil Iran produces and if OPEC+ countries stick with their agreements on oil production.. Republican Rep. Jim Jordan of Ohio blamed Biden for the rising prices in gas in a tweet Monday, noting that the average gas price increased by 86 cents per gallon from June 2020 to June 2021 and pointed at "President Biden's economy!". Similar arguments have been made by Republican Sen. Chuck Grassley of Iowa as well as right-wing groups on social media.. Facts First: It's misleading to blame the President for high gas prices, especially since one of the biggest reasons behind the surge is that the US economy is starting back up -- which is hardly bad news for a president who's been in office for 5 months.. Supply chains are complex and if any one thing could be singled out for the increase in gas prices it's the pandemic, which caused the global production of oil -- and many other goods -- to decrease last year as demand cratered.

Wyoming Senator John Barrasso, for example, has posted on his Facebook page ”Starting on his first day in office, Joe Biden waged an all-out war on #AmericanEnergy.” They point to a moratorium on oil and gas leases on federal lands , the cancellation of the Keystone Pipeline, and general regulatory hostility to fossil fuels as evidence of why the Biden White House is to blame for skyrocketing gas prices.. View photos The advantages of comparing online car insurance quotes are the following: Online quotes can be obtained from anywhere and at any time.. Online quotes will allow policyholders the chance to discover multiple insurance companies and check their prices.. Lying about past driving incidents can make the price estimates to be lower, but when dealing with an insurance company lying to them is useless.. Although drivers are recommended to not choose a policy just based on its price, drivers can easily sort quotes by insurance price.. For additional info, money-saving tips, and free car insurance quotes, visit https://compare-autoinsurance.Org/ Compare-autoinsurance.Org is an online provider of life, home, health, and auto insurance quotes.. This website is unique because it does not simply stick to one kind of insurance provider, but brings the clients the best deals from many different online insurance carriers.. On this site, customers have access to quotes for insurance plans from various agencies, such as local or nationwide agencies, brand names insurance companies, etc.. "Online quotes can easily help drivers obtain better car insurance deals.

Wyoming drivers are actually paying a little less for gas than the national average at $4.03 a gallon, up marginally from an average of $4.01, and there are still places in the Cowboy state–such as Natrona County–where gas is under $3.90 a gallon.. They say the blame lies directly at the steps of the White House and President Joe Biden.. Democrats accuse big oil companies of intentionally driving up the price of oil to increase profits.. They say it doesn’t make sense to blame Biden for forcing a decrease in production when it actually has increased over the past year.. So who do you think is to blame?. What Are The Main Benefits Of Comparing Car Insurance Quotes Online. On the internet, drivers can compare insurance prices and find out which sellers have the best offers.. View photos The advantages of comparing online car insurance quotes are the following: Online quotes can be obtained from anywhere and at any time.. Drivers that have busy working schedules, can compare quotes from anywhere and at any time, even at midnight.. For additional info, money-saving tips, and free car insurance quotes, visit https://compare-autoinsurance.Org/ Compare-autoinsurance.Org is an online provider of life, home, health, and auto insurance quotes.. On this site, customers have access to quotes for insurance plans from various agencies, such as local or nationwide agencies, brand names insurance companies, etc.. "Online quotes can easily help drivers obtain better car insurance deals.. CONTACT: Company Name: Internet Marketing CompanyPerson for contact Name: Gurgu CPhone Number: (818) 359-3898Email: [email protected] : https://compare-autoinsurance.Org/ SOURCE: Compare-autoinsurance.Org View source version on accesswire.Com:https://www.Accesswire.Com/595055/What-Are-The-Main-Benefits-Of-Comparing-Car-Insurance-Quotes-Online View photos

Videos

1. Why high gas prices actually hurt gas station owners’ profits
(Click On Detroit | Local 4 | WDIV)
2. Why high gas prices may be here to stay
(Washington Post)
3. What President Biden And Democrats Can Do To Stabilize Gas Prices
(MSNBC)
4. Conflict with Russia causing U.S. gas prices to surge
(CBS News)
5. Russia's invasion only partially fueling sky-high gas prices
(Global News)
6. Is COVID-19 to blame for skyrocketing gas prices? | Energy analyst explains what to prepare for
(CTV News)

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