In a three-page letter, he said Americans have been forced to shell out more dollars for fuel because refinery capacity has been sluggish.
“Amid a war that has raised prices more than $1.70 per gallon, historically high refinery profit margins are worsening that pain,” Mr. Biden wrote to six companies.
Mr. Biden said he will convene an emergency meeting on gas prices with Energy Secretary Jennifer Granholm in the coming days. In blunt terms, he said the companies “need to work with my administration” on concrete solutions as he tries to shift blame for soaring costs off his shoulders and onto Big Oil and the Russians.
Gas prices have risen to an average of $5 per gallon across the country at the start of the summer driving season. Demand is picking up after the worst of the pandemic but supply remains short.
Mr. Biden said refiners are trying to shake off the COVID-19 cobwebs, but he is worried about a disconnect between the price of oil and gasoline, saying the cost of gas role to an average of $5 from $4.25 in March even though oil cost about $120 per barrel in both instances.
“The difference — of more than 15% at the pump — is the result of the historically high profit margins for refining oil into gasoline, diesel and other refined products. Since the beginning of the year, refiners’ margins for refining gasoline and diesel have tripled and are currently at their highest levels ever recorded,” Mr. Biden wrote. “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.”
Mr. Biden sent letters to Marathon Petroleum Corp.; Valero Energy Corp.; ExxonMobil; Phillips 66; Chevron; BP; and Shell.
The leading driver of recent price spikes in gas has been the result of a limited U.S. refining capacity, which remains nearly 1 million barrels per day less than pre-pandemic levels, according to the Energy Information Administration. That means oil companies lack the immediate ability to significantly ramp up refined products.
Energy producers and industry analysts have said there are multiple reasons for this, namely that the Ukraine war has exacerbated global energy supplies that were already reeling from the pandemic.
• Ramsey Touchberry contributed to this report.
• Tom Howell Jr. can be reached at email@example.com.
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