WASHINGTON — During his press conference on Feb. 24 condemning Russia’s attack on Ukraine, and as the price of oil approached $100 a barrel, President Joe Biden addressed rising retail gasoline prices.
“My administration is using every tool at their disposal to protect American families and businesses from rising prices at the gas pump,” he said. “We’re taking active steps to bring down the cost, and American oil and gas companies should not exploit this moment to hike their prices to raise profits.”
He said U.S. sanctions against Russia were “specifically designed to allow energy payments to continue.”
The president also said that the United States would release oil from the Strategic Petroleum Reserve (SPR).
“We are closely monitoring energy supplies for any disruption,” he said. “We’ve been coordinating with major oil producing and consuming countries toward our common interests to secure global energy supplies. We are actively working with countries around the world to elevate collective release from the strategic petroleum reserves of major energy consuming countries. And the United States will release additional barrels of oil as conditions warrant.”
In November 2021, responding to the highest oil prices in seven years, President Biden authorized the release of 50 million barrels of crude oil from the U.S. Department of Energy’s (DOE) Strategic Petroleum Reserve (SPR) to help ensure adequate supply and lower pump prices during the pandemic.
“I know this is hard, and that Americans are already hurting,” the president said in his remarks about Ukraine. “I will do everything in my power to limit the pain the American people are feeling at the gas pump. This is critical to me. But this aggression cannot go unanswered. If it did, the consequences for America would be much worse. America stands up to bullies. We stand up for freedom. This is who we are.”
“Unfortunately, [SPR] releases or that specific release had many strings attached,” Patrick DeHaan, head of petroleum analysis at Gas Buddy, Boston, said in a video press conference. “The president is essentially loaning oil companies oil, so overall the increase last fall did not do a whole lot. It's unknown again at this time if the president will utilize the SPR. But it would likely need to be a sizable release.”
The president also issued a warning that raised the specter of the attack on the Colonial Pipeline in Georgia by a gang of Russia-linked hackers called DarkSide.
“If Russia pursues cyberattacks against our companies, our critical infrastructure, we are prepared to respond,” he said. “For months, we’ve been working closely with the private sector to harden our cyber defenses and sharpen our ability to respond to Russian cyberattacks.”
The Colonial Pipeline attack forced the nation’s largest pipeline to shut down on May 7, 2021, which caused long lines at the pump as some panicked consumers created the gasoline shortage they were attempting to avoid by draining gas stations in the Southeast of their gas supplies. The pipeline restarted May 12.
Gas prices were rising rapidly even before Russia’s invasion of Ukraine, and $4 a gallon gas is now likely across the country within weeks, according to a CNN Business report.
The average price of a gallon of regular stood at $3.54 nationwide Thursday, according to figures AAA collected from U.S gas stations. But wholesale gasoline prices soared 14 cents a gallon, or 5%, in trading Thursday, pushing oil futures above $100 a barrel for the benchmark Brent crude for the first time since 2014, said the report.
The jump in wholesale gas prices will likely be passed on to consumers at the pump, Tom Kloza, global head of energy analysis for the Oil Price Information Service, the Rockville, Md., firm that tracks fuels data for AAA, told CNN.
“Every single distributor and retailer will look to get filled up today,” he said. “They’ll be paying $3 for wholesale gas, but they’re worried about paying $4 a gallon next time.”
Kloza believes the national average will likely reach $4 a gallon by mid-March, the first time since the summer of 2008, when prices reached a record average of $4.11 a gallon.
Some areas are already paying at or near $4 a gallon, said the report. On Feb. 24, Oregon joined California and Hawaii with a statewide average at that mark, and Washington and Nevada are cents away from topping it as well. California leads the nation with a $4.77 per gallon average.
Some parts of the country with relatively low current gas prices might be able to avoid $4 averages, Kloza said. Texas, Oklahoma, Arkansas, Kansas, Missouri, Kentucky and Mississippi all had average prices Thursday of $3.25 or lower.
Some states may temporarily eliminate their gas taxes to give drivers some relief. U.S. senators Maggie Hassan (D-N.H.) and Mark Kelly (D-Ariz.) have introduced the Gas Prices Relief Act, legislation to lower high gas prices by temporarily suspending the federal gas tax through the end of the year to bring economic relief to motorists nationwide.
Few price spikes generate more pubic backlash than those at the gas pump, and politicians are afraid to pay the price for those spikes, said CNN. “Gasoline is a third rail of American politics,” Kloza told the news outlet.
Members help make our journalism possible. Become a CSP member today and unlock exclusive benefits, including unlimited access to all of our content. Sign up here.