The Biden administration is asking the world’s oil producers to consider the first principle of economics: supply and demand.
The White House said Wednesday that it was asking OPEC to ensure it is producing enough oil to ensure Americans aren’t spending too much at the pumps, according to a statement from national security adviser Jake Sullivan.
- “Higher gasoline costs, if left unchecked, risk harming the ongoing global recovery,” Sullivan said, and called on OPEC to restore oil production to pre-pandemic levels.
- The national security adviser added that President Joe Biden’s administration was talking with oil exporting countries to discuss “the importances of competitive markets in setting prices” and that “OPEC+ must do more to support the recovery.”
The White House also said it was asking asking federal agencies to investigate if gasoline sellers gouged fuel prices as Americans took to the highways for vacations and travel this summer, according to The Hill.
- “During this summer driving season, there have been divergences between oil prices and the cost of gasoline at the pump,” wrote National Economic Council Director Brian Deese in a letter to the Federal Trade Commission, reported The Hill. “While many factors can affect gas prices, the president wants to ensure that consumers are not paying more for gas because of anti-competitive or other illegal practices.”
- Deese asked that the trade commission see if prices at the pump spike more quickly than the cost of gasoline drops.
Fuels prices are much higher than a year ago
A gallon of gasoline costs about a $1 more than it did a year ago, The Associated Press reported, and that price has continued to climb throughout the summer.
The average gallon of gas in America costs around $3.19 cents, according to American Automobile Association data on Thursday. But there are large cost discrepancy nationally.
- Prices in the American West range from $3.59 to $4.40, with Utah’s average around $3.87.
- Fuel prices are cheapest in the South, with Mississippi drivers paying the least in the nation at $2.79 a gallon.
When are fuel prices going to go down?
It’s unclear when, or if, gas prices will come back down, but OPEC has committed producing more oil throughout the next year, Bloomberg reported. When there is more supply, the economic principle says, prices should go down.
But America isn’t through the summer driving surge yet, meaning demand for gasoline is still high, AAA reported this week.
- “We continue to see very robust gasoline demand for the peak summer driving season,” said AAA spokesperson Jeanette McGee in a statement. “The latest demand rate was 2% higher than the same time period in 2019, while gasoline stocks are about 1% below.”
In early July, Deseret News reported that fuel prices would continue to go up until the fall. Unfortunately, that reporting seems to be panning out.