WASHINGTON — President Joe Biden asked the Federal Trade Commission on Wednesday to investigate "anti-consumer" behavior by oil and gas companies and whether it's a reason for the soaring gas prices across the country.
Biden’s letter to Lina Khan, chair of the FTC, claims “mounting evidence of anti-consumer behavior by oil and gas companies.” Biden notes that prices at the pump have risen even as the costs of refined fuel have fallen and industry profits have gone up.
"Usually, prices at the pump correspond to movements in the price of unfinished gasoline, which is the main ingredient in the gas people buy at the gas station," said Biden, in his letter on Wednesday. "But 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."
Around 48 million people will take to the roads for the Thanksgiving holiday, according predictions by motorist assistance company AAA. At around $3.40, the average price at the pump this week is the highest since 2014, said Patrick De Haan, head of petroleum analysis at GasBuddy.
Average prices are even higher in certain states, topping $4 in California and parts of the Pacific Northwest.
After surpassing $3 a gallon for the first time in more than half a decade in the spring, the average cost of a gallon has steadily trickled up. Experts say there are multiple factors for the increase, from pandemic-related supply issues to Hurricane Ida, and are forecasting that energy prices will continue to rise in the coming months.
Biden adds, the two largest oil and gas companies in the U.S., as measured by market capitalization, are on track to nearly double their net income over 2019, the last full year before the Covid pandemic.
"I do not accept hard-working Americans paying more for gas because of anti-competitive or otherwise potentially illegal contact," said Biden.
The American Petroleum Institute refuted the claims in the letter, citing increased demand as the economy comes back and is outpacing supply.
"Rather than launching investigations on markets that are regulated and closely monitored on a daily basis or pleading with OPEC [Organization of the Petroleum Exporting Countries] to increase supply, we should be encouraging the safe and responsible development of American-made oil and natural gas," said API senior vice president of policy, economics, and regulatory affairs Frank Macchiarola.