Biden taps into oil reserves to ease fuel crisis
WASHINGTON: President Joe Biden tapped the US strategic oil reserves in a bid to reassure Americans angry about inflation and goods shortages as they head off to Thanksgiving — and to buoy up his sinking poll ratings.
Facing growing discontent around the country over inflation and especially the soaring price of fuel in filling stations, Biden on Tuesday announced a coordinated plan with other big consumers to release national oil reserves onto the market.
The White House said that following weeks of negotiations, “this release will be taken in parallel with other major energy consuming nations including
China, India, Japan, Republic of Korea and the United Kingdom.”
“It will take time but before long you should see the price of gas drop,” Biden said in a speech at the White House.
Beijing and Tokyo confirmed Wednesday that they would join the US but gave few details.
Despite the announcement, both main crude contracts surged soon a er the news -- WTI more than two per cent and Brent more than three per cent — with analysts saying the release had been well telegraphed but the amount was less than expected. And they extended the gains in Asian trade.
While the US economy is rebounding strongly from the Covid-19 lockdowns, supply chain disruption and inflation is stirring anxiety as the holiday season begins with Thanksgiving today.
“Moms and dads are worried asking will there be enough food we can afford to buy for the holidays? Will we be able to get Christmas presents to the kids on time?” Biden said, acknowledging that for many the price rises are ‘painful’.
However, he pushed back at critics who accused him of failing to grasp the challenge. Biden noted that the two biggest trading ports, both in southern California, were now working 24/7, as opposed to just 40 hours a week.
Biden said the price of gasoline in the wholesale market has fallen by about 10 per cent in the last few years but the price at the pump hasn’t budged.
“In other words, gas supply companies are paying less and making a lot more,” he said, accusing companies of “pocketing the difference” between wholesale and retail prices.
Average fuel prices at filling stations are US$3.41 a gallon, the highest level since 2014, according to latest figures from the AAA motorists’ association. This represents an increase of US$1.29 over gasoline prices a year ago.