Politicians need to square with the American people on gasoline prices

Honesty in politics is nearly non-existent, but voters willingness to accept this dishonesty as fact is alive and well. Take gasoline prices as an example. It’s Biden’s fault, it’s the oil companies fault, right? Nope‼️

We seem to look for easy answers that fit with out political views and the facts be damned. We see it not only with gas prices, but healthcare, Medicare, Social Security, any number of issues.

Where is Joe Friday when you need him? “Just the facts, ma’am.”

Members of Congress from both parties are politicizing and spreading bad information on the energy crisis resulting from Russia’s invasion of Ukraine. Given the acrimony in U.S. politics today, this isn’t surprising, but misinformation on the real cause of high gasoline prices is a disservice to U.S. citizens. Democrats blame the oil and gas industry and Republicans blame President Joe Biden, but global market forces are the real culprit. Better understanding of the energy system, among policymakers and ordinary people, is crucial as the United States and world strive to transition to a system with net-zero greenhouse gas emissions.

Rising U.S. gasoline prices are the result of global oil market conditions.

Rep. Frank Pallone Jr. summarized the majority Democrats’ position when he accused the oil companies of “ripping off the American people” and “at a time of record profits… refusing to increase production.” But oil is a globally fungible good with a price set on the global market.

None of the U.S. oil companies is large enough to have much influence on these prices. Furthermore, these companies make production decisions based on business criteria, including expected future prices, availability of capital, and the company’s appetite for risk. Since the U.S. companies cannot influence the global oil price, whether the new production will reduce prices is not one of these criteria. 

Source: Politicians need to square with the American people on gasoline prices

5 comments

  1. Oil companies make nowhere near the profit from gas & oil that the government does. Taxes are much higher than profits.

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  2. ive-heard-the-rhetoric-from-both-sides-time-to-do-2408745.png (500×522)

    It’s complicated. Supply and demand is easy if you just look at today, As in, companies are raising prices because of “inflation”, —and— raking in the highest profits in years.

    But, some economists will say that corporations are compensating for big losses in the last few years.* Probably a grain of truth there, depending on the industry.

    But, inflation hits everyone differently, and there surely can’t be any doubt that those on the lowest income group are hit hardest, simply because essentials already comprise most of their budgets. I just filled my car and truck for $160, but that will last over a month, and is less than ½ percent of net monthly income. Not so for the kids and grandkids.

    *And stockpiling for the losses they see coming in the next few.

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  3. Add to the above that oil companies know they are in the crosshairs of political plans to end their business. Who invests in new equipment and exploration when you are told you are going out of business sooner rather than later. The Biden Administration came in day one shooting from the hip at the oil industry. Reduction of CO2 has relegated the oil business to a nuisance in the public mind.

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  4. Global forces are now driving the market is 100% true. But the US went from a net exporter to an importer. How? Covid cut demand world wide and American oil fields shutdown and workers were laid off. Binden took office and declared war on fossil fuels. Woke banks and other investors will not lend to the energy industry. EPA has toughened the permitting process. US oil companies did not want to invest in the oil fields only to over produce again and have the price per barrel drop too low again. There is still a shortage of materials and truck drivers to this day and with inflation they require the barrel price of oil to be even higher for the oil producers to start drilling again. AND THEN there is Ukrainian – Russian war which put uncertainty into the oil futures contracts.

    Truth is that the price of gas was cause by the supply and demand and the lack of willingness by investors to look dirty investing in oil due to the war on fossil fuels.
    Another fact, besides the trillions of dollars that the feds printed, higher fuel prices drives inflation. Everything we buy gets transported thus costs more. Commuters costs go up and demand raises or quit to find jobs closer to home. But Binden tried to blame inflation on Russia when it has been happening for over a year now.

    Note, both Republican and democrat presidents have had their head in the sand when it comes to inflation.

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