By Tsvetana Paraskova • Biden may use the Cold-War era Defense Production Act To stimulate gasoline production. • National average gasoline prices hit $5 per gallon last week. • The Biden Administration sent a letter to U.S. oil firms, urging them to step up production. U.S. President Joe Biden is open to using all reasonable tools the federal government has to boost fuel production and lower gasoline prices for Americans, including emergency Cold-War era acts such as the Defense Production Act, White House Press Secretary Karine Jean-Pierre said during a briefing. 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,” Jean-Pierre said on Wednesday, on the day on which the President sent a letter to oil companies telling them to increase gasoline production. “So, we know where to put the blame: on the war. But oil companies, they have — oil refineries, they have a responsibility too. What they have been doing is taking advantage of the war,” Jean-Pierre told reporters. “But what we’re trying to do — by putting out the letter, we’re saying, “Hey, we need you to act. It is time to act.” We want to have a conversation,” she added. 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.” Commenting on the letter, the White House press secretary said that “President Biden is putting a spotlight on this and calling on oil refiners to invest those records — those record profits to increase capacity so cost at the pump could come down.” “He is signaling that he is prepared to use any emergency tools he has, but these companies have a responsibility to step up too. We are focused on getting to solutions,” Jean-Pierre said. 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. In America, national average gasoline prices hit $5 per gallon last week, the highest ever, in a major blow to the Biden Administration and Democrats ahead of the mid-term elections in November.
Crude Oil