The White House Press Secretary Karine Jean-Pierre on Sunday responded to criticism from Jeff Bezos about President Biden's call for oil executives to reduce gas prices, saying high gas prices are emblematic of "a market that is failing the American consumer."
Driving the news: After Biden tweeted on Saturday reiterating calls for oil companies to lower prices, Bezos responded by tweeting, "inflation is far too important a problem for the White House to keep making statements like this."
- "It’s either straight ahead misdirection or a deep misunderstanding of basic market dynamics," Bezos added.
- "Oil prices have dropped by about $15 over the past month, but prices at the pump have barely come down," Jean-Pierre responded via Twitter. "That’s not 'basic market dynamics.' It’s a market that is failing the American consumer."
- "But I guess it’s not surprising that you think oil and gas companies using market power to reap record profits at the expense of the American people is the way our economy is supposed to work," she added.
State of play: While crude oil prices have fallen, it's not unusual for it to take some time for gas prices to reflect the change.
- The national average price for regular gasoline is currently $4.81, down slightly from when it hit a record $5 per gallon last month.
- However, most oil refineries are operating at or near maximum capacity, making it difficult to meet Biden's demand that they produce more gasoline in order to increase supply and lower prices.
- Back in March, Senate Majority Leader Chuck Schumer said the incongruity between falling crude oil prices and high gas prices "smacks of price gouging."
But, but, but: The cost of crude oil isn't the only factor that goes into determining prices at the pump, and oil companies have a limited role in setting the ultimate retail prices, according to Dallas Fed.
The big picture: The Biden administration has tried several strategies to temper soaring gas prices, including releasing oil from the Strategic Petroleum Reserve, easing rules around E15 gasoline, and calling for a suspension of the federal gas tax, which Congress has not done.
- In a letter to CEOs of the largest oil refineries in the U.S. last month, Biden made note of oil companies' "historically high profit margins" and urged them to boost production.
- Oil giants have criticized the Biden administration for not issuing new drilling leases on public lands, canceling the Keystone Pipeline and emphasizing its net zero carbon emissions climate agenda.
