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U.S. Secretary of Energy Jennifer Granholm is set to discuss gasoline prices at a meeting with refining executives next week, sources with knowledge of the plans told Reuters on Thursday.
The meeting is slated for June 23, according to Reuters sources.
U.S. national average gasoline price hit $5 per gallon last week, putting additional pressure on the Biden Administration as gas prices are now nearly $2 a gallon higher than they were at this time last year, and inflation saw its fastest annual increase in May since the end of 1981.
Secretary Granholm's meeting with refining executives comes after President Joe Biden called on oil companies to boost fuel production to lower prices at the pump.
In a letter to oil companies on Wednesday, President Biden wrote that "At a time of war, refinery profit margins well above normal being passed directly onto American families are not acceptable."
"The lack of refining capacity - and resulting unprecedented refinery profit margins - are blunting the impact of the historic actions my Administration has taken to address Vladimir Putin's Price Hike and are driving up costs for consumers," the President wrote to companies including ExxonMobil, Valero Energy, and Marathon Petroleum.
President Biden "is open to all reasonable uses of the federal government's tools to increase output and lower costs at the pump, including emergency authorities like the Defense Production Act," White House Press Secretary Karine Jean-Pierre said on the day on which the letter to oil firms was sent.
Rallying oil prices, recovering demand post-COVID, and constrained refining capacity are the key reasons for record-high gasoline prices in the U.S. and many other countries.
Crude oil prices are the single biggest factor determining U.S. gasoline prices, accounting for over 53 percent of the average retail price per gallon. Moreover, some 1 million bpd of America's refinery capacity has been shut permanently since the start of the pandemic, as refiners have opted to either close money-losing facilities or convert some of them into biofuel production sites. U.S. operable refinery capacity was at just over 18 million bpd in 2021, the lowest since 2015, per EIA data.
By Tsvetana Paraskova for Oilprice.com
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Tsvetana is a writer for Oilprice.com with over a decade of experience writing for news outlets such as iNVEZZ and SeeNews.