Top energy executives will try to convince the White House on Thursday not to ban fuel exports in a desperate bid to drive down eye-watering gasoline prices.
The emergency meeting led by Energy Secretary Jennifer Granholm follows weeks of confusion between President Biden and the oil companies over the cause of intense price spikes affecting millions around the world.
On Wednesday, Biden asked Congress to pass a three-month suspension of federal taxes on gasoline and diesel, a proposal that had already been criticized by members of both parties.
The president has previously accused oil companies of speculation and charged that they are not refining or drilling enough to deal with price increases caused by Russia’s invasion of Ukraine, prompting revulsion from the companies and ridicule from critics who point out that Biden discouraged fossil fuel production and promoted it. – called “green energy” during much of his administration.
In the weeks leading up to the meeting, White House officials signaled to refiners that they were considering a partial or total ban on fuel exports to help lower the domestic price of gasoline and diesel.
Granholm said Wednesday at a White House briefing that Biden hopes to gain bipartisan support for the gas tax exemption, despite an initially lukewarm reception.
Asked about the industry’s unease over a possible export ban, Granholm said Biden “is not willing to take the tools off the table, but we are willing to listen.”
According to data from the National Association of Convenience Stores, there are about 145,000 gas stations in the US. Oil refining companies own less than 5% of the stores, and about 60% are owned by a single person or family operating in just one location.
The United States is the world’s largest exporter of refined products, shipping nearly a record 6 million barrels a day of products, including gasoline and diesel, according to federal data.
If Biden curbs exports, he could temporarily flood the market with fuel — lowering prices but risking reduced refinery output.
“Not only will outright limitations or bans on petroleum products have the exact opposite effect as intended – raising fuel prices rather than lowering them and putting additional refining capacity at risk – it would harm our allies in Latin America and Europe.” , said a spokesperson for US fuel and petrochemical manufacturers said.
Gas prices gradually increased during 2021 — from around $2.30 to $3.27 a gallon — before skyrocketing when Russia invaded Ukraine on Feb.
In 2015, the US lifted a 40-year ban on crude oil exports that was implemented to help keep the country less dependent on the Middle East.
In the last two years, the United States has become one of the most important nations in the global energy markets as a net exporter of crude oil and refined products.
“If refineries can’t export, they will just slow down production and reduce the refinery’s utilization rate,” said Bob Yawger, director of energy futures at Mizuho.
According to Yawger, excess product would likely be shipped to inventories and result in refineries losing money as a result.
“Refiners are not a charity,” he added.
The price spike comes amid the threat of recession amid rising inflation and other alarming signs of a slumping economy, crushing Biden’s approval ratings and casting a dark cloud over the Democrats’ chances of retaining power in Congress in the election. from November.
Biden said in an interview last week that “until gas prices started to rise … things were a lot more, they were a lot more optimistic.”
with pole wires