The White House is calling on the Organization of the Petroleum Exporting Countries (OPEC) to boost their oil production to lower gas prices in the United States. The call comes amidst concerns that inflation is driving up the price of oil.
According to Consumer Price Index data released on Wednesday, the data indicates that the price of "gasoline [for] (all types)" in the U.S. has increased by 25.7 percent since Jan. 2021, or if looked at differently, 41.2 percent since July 2020.
This week, the Biden administration spoke with the de facto leader of OPEC — Saudi Arabia.
The White House stated that it had a July agreement with the group to boost its monthly barrel production by 400,000— production would start in Aug. and extend into 2022. But that is "simply not enough" during a "critical moment in the global recovery," as CNBC states — citing from the administration.
"We are engaging with relevant OPEC+ members on the importance of competitive markets in setting prices," National Security Advisor Jake Sullivan stated. "Competitive energy markets will ensure reliable and stable energy supplies, and OPEC+ must do more to support the recovery."
In May, the national average for gas prices crossed the $3 mark. This would be the first increase to cross that line since 2014.
One unnamed senior White House official responded to the concern by stating, "the president recognizes that gas prices can put a pinch on the family budget. He'd like his administration to use whatever tools that it has to help address the cost of gas, to help bring those prices down."
The call to meet renewed production demands comes as the petroleum market is still in a rebound. In April 2020, West Texas Intermediate crude futures, sank into negative territory for the first time on record. It would seem apparent that the COVID-19 pandemic had zapped the demand for petroleum.
Subsequently, around the same time, OPEC+ removed 10 million barrels per day from the market in an effort to maintain prices.
But now the Biden administration is calling on the Federal Trade Commission to "monitor the U.S. gasoline market" and see if there is any illegal activity afoot causing consumers to pay an unfair bill.
A letter from the National Economic Council to the FTC urged the regulatory body to look into why gas prices are rising.
"With its suite of tools to monitor industry prices, review merger-and-acquisition activity, conduct market studies, and investigate market manipulation and anti-competitive practices, the FTC is well placed to lead the effort to evaluate what is happening in the U.S. gasoline market and take any necessary steps to address illegal conduct," the letter states.
One other unnamed senior White House official commented on the matter, stating, "knowing the FTC is scrutinizing this market could have an impact relatively quickly. It's worth the players in this market recognizing that this agency with enforcement authority is looking carefully at what's going on."
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