The White House is reportedly considering putting limits on fuel exports in a bid to contain prices at the pump, which have topped $5 per gallon nationally.
Per a Bloomberg report citing unnamed sources familiar with the discussion, the topic came to the fore in the last few days as President Biden accused the oil production and refining industry of taking advantage of the oil price rally to profit t the expense of consumers.
Last week, Biden accused oil producers in general and Exxon specifically of making more money than they have a right to make in the current situation.
"Why aren't they drilling? Because they make more money not producing more oil," he said. "Exxon, start investing and start paying your taxes," he said during a speech.
Then this week, the President took aim at refiners, writing in a letter to several of the largest players in this field that "At a time of war, refinery profit margins well above normal being passed directly onto American families are not acceptable."
Biden added in that letter that "My administration is prepared to use all reasonable and appropriate federal government tools and emergency authorities to increase refinery capacity and output in the near term, and to ensure that every region of this country is appropriately supplied."
Fuel exports have been named as one of the factors contributing to higher retail fuel prices at home as they have substantially increased to fill the gap opening up in Europe as it shuns Russian gasoline and diesel.
So far this year, U.S. gasoline and diesel exports have averaged 755,000 bpd, according to data from the Energy Information Administration, which was up 681,000 bpd over the first five months of 2021.
Curbing exports of fuels will almost undoubtedly reduce prices at home, but it is a politically sensitive decision that might sour relations with Europe. What's more, some analysts have pointed out that limiting fuel exports will not have a long-term effect on domestic fuel prices.
By Irina Slav for Oilprice.com
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