Gas prices are high. Here's why
New York (CNN Business)The American Petroleum Institute on Wednesday slammed President Joe Biden’s push for a Federal Trade Commission investigation of the oil industry and renewed its call for the federal government to encourage domestic oil and gas production.
“This is a distraction from the fundamental shift that is taking place and the ill-advised government decisions that are exacerbating this challenging situation,” Frank Macchiarola, the API’s senior vice president of policy, economy and regulatory affairs, said in a statement to CNN.
Biden asked the FTC on Wednesday to “immediately” investigate whether illegal activity by oil and gas companies is lifting gasoline prices.
“Gasoline prices at the pump remain high, even though oil and gas companies’ costs are declining,” Biden wrote in a letter to the FTC.
Even though oil and gasoline have soared to seven-year highs, US oil production remains below pre-pandemic levels. Industry experts have told CNN that is in large part because oil companies are focused on returning cash to shareholders and living within their means after years of excessive drilling. There is also significant uncertainty over the future of demand due to increased attention on the climate crisis.
“Rather than launching investigations on markets that are closely regulated and closely monitored on a daily basis or pleading with OPEC to increase supply,” the API executive wrote, “we should be encouraging the safe and responsible development of American-made oil and natural gas.”
The API explained the price spike by pointing to how demand has returned as the economy has reopened, outpacing supply.
“Further impacting the imbalance is the continued decision from the administration to restrict access to America’s energy supply and cancel important infrastructure projects,” Macchiarola said.
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