Top energy company executives will try to convince the White House Thursday not to ban fuel exports in a desperate bid to bring down eye-watering gasoline prices.
The emergency meeting led by Energy Secretary Jennifer Granholm follows weeks of mudslinging between President Biden and oil companies over the cause of the intense price spikes affecting millions across the globe.
On Wednesday, Biden called on Congress to pass a three-month suspension of federal gasoline and diesel taxes, a proposal that has previously been criticized by members of both parties.
The president previously accused oil companies of profiteering and charged that they are not refining or drilling enough to address price increases caused by Russia’s invasion of Ukraine, drawing pushback from the companies and ridicule from critics who point out Biden has discouraged fossil fuel production and promoted so-called “green energy” for much of his administration.
In the weeks leading up to the meeting, White House officials signaled to refiners that they were considering either a partial or full ban on fuel exports to help lower the domestic price of gasoline and diesel.
Granholm said Wednesday at a White House briefing that Biden hopes to win bipartisan support for the gas tax waiver, despite an initially lukewarm reception.
Asked about the industry’s unease with a possible export ban, Granholm said Biden is “not willing to take tools off the table, but we’re willing to listen.”
According to data from the National Association of Convenience Stores, there are about 145,000 US fueling stations. Companies that refine oil own less than 5% of the stores and about 60% are owned by a single person or family that operates just one location.
The US is the world’s biggest exporter of refined products, shipping a near-record of 6 million barrels per day of products — including gasoline and diesel, according to federal data.
Should Biden restrict exports, it could temporarily flood the market with fuel — lowering prices but risking reduced output from refiners.
“Not only will limitations or outright bans of petroleum products have the exact opposite effect than intended – raising fuel prices instead of lowering them and placing additional refining capacity at risk – it would hurt our allies in Latin America and Europe,” a spokesperson for the American Fuel and Petrochemical Manufacturers said.
Gas prices increased gradually during 2021 — from about $2.30 to $3.27 per gallon —before surging when Russia invaded Ukraine on Feb. 24.
In 2015, the US lifted a 40-year ban on crude oil exports that was put in place to help keep the country less dependent on the Middle East.
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In the last two years, the US has become one of the most important nations in global energy markets as a result of being a net exporter of crude oil and refined products.
“If refiners aren’t allowed to export, they’re just going to slow down production and cut the refinery utilization rate,” said Bob Yawger, director of energy futures at Mizuho.
According to Yawger, excess products would likely be sent into inventories, and would result in refiners losing money on it.
“Refiners are not a charity,” he added.
The price hike comes during the threat of recession amid soaring inflation and other alarming signs of a failing economy, crushing Biden’s approval ratings and casting a dark cloud over Democrats’ chances of retaining congressional power in November’s elections.
