President Biden came under fire from fellow politicians this week after he called the record-high retail fuel prices in the U.S. part of "an incredible transition" away from oil and gas.
"Here's the situation. And when it comes to the gas prices, we're going through an incredible transition that is taking place that, God willing, when it's over, we'll be stronger, and the world will be stronger and less reliant on fossil fuels when this is over," Biden said during a joint news conference with Japanese Prime Minister Fumio Kishida.
The President's remarks come as the average gasoline price in the U.S. reached $4.596 per gallon at the start of this week, with diesel prices at $5.554 per gallon despite the planned massive release of crude oil from the strategic petroleum reserve and new plans for the release of diesel from federal reserves as well.
"And what I've been able to do to keep it from getting even worse - and it's bad. The price of gas at the pump is something that I told you - you heard me say before - it would be a matter of great discussion at my kitchen table when I was a kid growing up. It's affecting a lot of families," Biden also said.
"But we have released over two hundred and, I think, fifty-seven thousand - million barrels of oil, I should say. Us and the rest of the world we convinced to get involved. It's helped, but it's not been enough," the U.S. President added.
Although gasoline prices are putting pressure on households, some experts are more concerned about diesel prices, which help keep inflation higher by adding to the transportation costs of most goods shipped and sold across the U.S. In the East Coast, according to the WSJ, diesel fuel supplies are at the lowest since 1990 at least.
By Charles Kennedy for Oilprice.com
More Top Reads from Oilprice.com:
Charles is a writer for Oilprice.com More
Comments
Now President Biden is changing tack by claiming that high gasoline prices are part of an ‘incredible transition away from oil and gas’. However, this will cut no ice with American consumers.
I would advise President Biden to let the market take its course. If crude prices continue to rise, the global economy will initiate a demand destruction but this will come at the expense of global economic growth and an eventual harsh recession. Moreover, he should be frank with the American people and tell them that nobody can control oil prices. Only market fundamentals can. And this should indicate to him that threatening OPEC with the NOPEC bill won't work and will be the sure way of losing whatever remaining allies he may still have in the Arab Gulf region.
The only long-term solution is immediate and extensive global investments amounting to $600 bn annually for the next ten years in expanding oil and gas production and refining capacities and this takes a minimum of five years to reach fruition.
Dr Mamdouh G Salameh
International Oil Economist
Visiting Professor of Energy Economics at ESCP Europe Business School, London