President Biden on Wednesday asked the head of the Federal Trade Commission to investigate whether oil companies are illegally increasing prices at the pump, as he scrambles to assuage voters’ anger over soaring consumer prices.
“The Federal Trade Commission has authority to consider whether illegal conduct is costing families at the pump. I believe you should do so immediately,” Mr. Biden wrote in a letter to FTC Chairwoman Lina Khan.
The price of unleaded gasoline has increased 51.3% in the past 12 months, while inflation has hit a 31-year high. Price increases and shortages on a wide variety of consumer goods have contributed to Mr. Biden‘s plummeting approval ratings in polls.
The president told the FTC that prices at the pump “have continued to rise, even as refined fuel costs go down and industry profits go up.”
“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,” the president wrote. “This unexplained large gap between the price of unfinished gasoline and the average price at the pump is well above the pre-pandemic average.”
He asked the agency to “bring all of the Commission‘s tools to bear if you uncover any wrongdoing.”
FTC spokeswoman Lindsay Kryzak told The Wall Street Journal that the agency “is concerned about this issue, and we are looking into it.”
The average gallon of gas was almost $3.41 in the U.S. on Wednesday, according to the American Automobile Association. That’s up from $2.12 per gallon a year ago.
In his letter, Mr. Biden said the “two largest oil and gas companies in the United States” — Exxon and Chevron — will nearly double their net income this year compared with 2019.
Republicans have criticized Mr. Biden for taking actions that they say curtail domestic energy production, while he also asked OPEC unsuccessfully to increase oil output to lower prices. For example, Mr. Biden canceled the Keystone XL crude oil pipeline on his first day in office.
The administration also has sought to limit drilling for oil and natural gas on federal lands.
Sen. John Barrasso, Wyoming Republican, said on Twitter that Mr. Biden professes to be worried about oil companies charging families more at the pump “but he is fine making them pay more because of his administration’s illegal policies.”
An official with the American Petroleum Institute said the president’s focus is misplaced.
“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 API Senior Vice President Frank Macchiarola. “Demand has returned as the economy comes back and is outpacing supply.”
He blamed “the continued decision from the administration to restrict access to America’s energy supply and cancel important infrastructure projects.”
“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,” Mr. Macchiarola said.
Republicans accused Mr. Biden of engaging in political games and looking weak.
“Joe Biden is the President of the United States. His response to the high cost of gas is to ‘send a letter’ to the FTC,” Sen. Tom Cotton, Arkansas Republican, tweeted. “What an embarrassing display of impotence.”
“This is a PR stunt you pull when you want to ‘look’ like you are addressing high gas prices, but you don’t actually care about addressing high gas prices,” Andrew Clark, a Republican strategist and former Trump campaign aide, tweeted. “If this was actually happening, Biden wouldn’t need to write a letter to the FTC to look into it.”
OPEC+ decided in April 2020 to cut production by nearly 10 million barrels per day, and U.S. producers also curbed output. The reductions in supply, combined with increasing demand as countries emerged from the pandemic, have resulted in rising prices.
The White House has resisted calls to release oil from the nation’s Strategic Petroleum Reserve, with a Biden official telling a Senate panel this week that the impact on gas prices would be “relatively short-lived.”
The FTC in August agreed at the urging of the White House to review possible illegal business practices in the petroleum industry.