Biden Urges FTC to Investigate Gas Companies, Markets Over Continued Price Surges

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Biden Gas Price Investigation Overview:

• Why: Biden encouraged the FTC to begin investigating why gas prices are increasing, while costs for gas companies are decreasing.
• Who: President Joe Biden wrote a letter to Federal Trade Commission Chair Lina Khan.
• Where: Gasoline prices have been rising nationwide.

President Joe Biden has called upon the Federal Trade Commission to “immediately” investigate why gas prices continue to rise for consumers while gas companies see decreased costs alongside increased profits.

President Biden expressed his concerns in a letter to the FTC Chair Lina Khan released on Wednesday. “I do not accept hard-working Americans paying more for gas because of anti-competitive or otherwise potentially illegal conduct,” he wrote. 

Earlier this year, also at Biden’s request, the FTC strengthened its oversight of mergers in the oil and gas sector that might result in less choice for consumers and higher prices. 

Given the continued increase in prices at the pump, this move doesn’t seem to have been enough to keep gas companies and costs in check. 

Biden Questions ‘Unexplained Large Gap’ in Gas Prices

Biden notes in his letter to the FTC Chair that the price consumers pay for gas usually corresponds to the price of unfinished gasoline, the main ingredient in the gas we buy. In the last month, however, the President pointed out that the prices have not aligned as they should. 

“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 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.”

While consumers are facing ever-increasing gas prices, gas companies are “generating significant profits,” according to Biden. 

Exxon and Chevron, the country’s two largest oil and gas companies by market capitalization, are “on track to nearly double their net income over 2019.” Additionally, they “have announced plans to engage in billions of dollars of stock buybacks and dividends this year or next,” Biden wrote.

The FTC said in a statement that it “is concerned about this issue,” and that they are looking into it.

American Petroleum Institute Calls Biden’s Letter ‘Distraction’

The American Petroleum Institute, a nationwide trade association for gas and oil companies, released a statement from senior vice president Frank Macchiarola on its Twitter account in response to Biden’s letter.

“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,” Macchiarola said.

Macchiarola points to increased demand outpacing supply as one reason for gas price increases. He also turns the blame onto Biden and his administration for restricting “access to America’s energy supply” and canceling “important infrastructure projects.” 

Americans are not the only ones paying more at the pump. UK consumers have been facing twin petrol and gas shortages due to labor and supply issues.  

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