Biden warns oil and gas companies against price gouging as he announces additional petroleum reserve releases

‘You should not be using your profits to buy back stock or for dividends. Not now, not while a war is raging’

Energy Secretary Jennifer Granholm, left, and Special Presidential Coordinator Amos Hochstein, right, listen as President Joe Biden speaks about energy and the Strategic Petroleum Reserve during an event in the Roosevelt Room of the White House, Wednesday, Oct. 19, 2022, in Washington. (AP Photo/Evan Vucci) (AP)

President Joe Biden on Wednesday cautioned petroeum producers and refiners against using the ongoing war in Ukraine as an excuse to soak additional profits from consumers through high gasoline prices as he announced the release of an additional 15 million barrels from the US strategic petroleum reserves.

Speaking from the Roosevelt room of the White House, Mr Biden said the price of gasoline has fallen by 30 per cent from the record highs it reached over the summer, including price drops each day in the last week. He said the release of these 15 million barrels is another “critical step” his administration is taking to reduce prices, along with announcing future reserve purchases at fixed prices.

The president also called on petroleum producers to use the certainty they would gain from the fixed-price contracts to sell the government more oil at $70 per barrel to pass savings to consumers.

“My message to all companies is this: You're sitting on record profits. And you're and we're giving you more certainty. So you can act now to increase oil production,” he said.

But Mr Biden also castigated oil companies for using profits that have reached as high as $70bn last quarter (for the largest six publicly-traded oil companies) for stock buybacks instead of lowering prices.

“That's great if you own a lot of stock in an oil company or if you're an executive ... but it's not the case for the vast majority of Americans,” he said.

Continuing, Mr Biden also lambasted producers for failing to drop the price of gas in tandem with reductions in the price of crude oil.

“The price of oil has fallen nearly $40 a barrel since mid June. That's a 30% drop in the price of a barrel of oil, but guess what? Gas prices haven't fallen that much,” he said. “That's not right”.

“You should not be using your profits to buy back stock or for dividends. Not now, not while a war is raging,” he said. “You should be using these record breaking profits to increase production and refining ... bring down the price you charge at the pump to reflect what you pay for the product,” he said. “You still make a significant profit, your shareholders will still do very well, and the American people catch a break they deserve and get a fair price of the pump as well”.