US President Joe Biden has called on the Federal Trade Commission to investigate whether the country’s biggest oil companies including ExxonMobil and Chevron are engaged in “potentially illegal conduct” that is resulting in higher gasoline prices for Americans.
In a letter to FTC chair Lina Khan, Biden said there was “mounting evidence of anti-consumer behaviour” in the market, noting that the two “largest oil and gas companies . . . as measured by market capitalisation” were planning “billions of dollars of stock buybacks and dividends” even as prices at the pump continue to rise.
The top two US oil and gas companies by market valuation are Exxon and Chevron. Biden said the companies were “generating significant” profits, adding: “The bottom line is this: gasoline prices at the pump remain high, even though oil and gas companies’ costs are declining.”
The president’s intervention comes as he faces mounting political pressure over rising fuel prices and surging inflation. His approval rating has slumped in recent weeks, with an increasing share of Americans taking a dim view of his handling of the economy.
The Obama administration also enlisted the FTC to probe rising gasoline prices as part of an “Oil and Gas Price Fraud Working Group” announced in 2011. The commission determined that the main driver of fuel prices was the price of crude oil. In 2006, President George W Bush called for an investigation into whether oil companies were manipulating prices.
The Biden administration is considering releasing crude oil from a federal strategic stockpile in a bid to drive down petrol prices and has repeatedly called on Saudi Arabia, Russia and other Opec+ oil countries to lift crude production.
“The FTC is concerned about this issue, and we are looking into it,” the regulator said.
Analysts said Biden’s letter to the FTC followed a familiar political playbook for presidents seeking culprits for rising fuel costs and would have little impact on prices. “How many times has the FTC investigated gas prices and turned up nothing? It’s a political stunt,” said Robert Campbell, head of oil products at consultancy Energy Aspects.
“The biggest influence on gasoline prices is the price of crude. The global market is tight. There’s not a lot the US can do about that right now,” Campbell said.