White House scrambling to solve gas price surge

The White House is scrambling to help tackle rising gas prices which could put Democrats to rout in this fall’s midterm elections.

On Wednesday, US President Joe Biden’s economics team and outside advisers met to discuss various options, with more meetings expected on Thursday.

Meanwhile, Energy Secretary Jennifer Granholm is set to convene an emergency meeting in the coming days.

The White House is also mulling over endorsing a federal gas tax holiday while at the same time it is getting ready for a controversial summit with Saudi Arabia where Biden and Saudi officials are expected to discuss the global fuel supply as a major point of discussion.

“All options are being considered obviously,” said one administration official without clarifying whether the idea was gaining traction.

The White House also on Wednesday chastised some of the largest oil companies for profiteering off surging energy prices.

The US president sent a letter to seven major oil executives, demanding that they take actions to boost the supply of gasoline, diesel and other refined products on the market.

“I understand that many factors contributed to the business decisions to reduce refinery capacity, which occurred before I took office. But at a time of war, refinery profit margins well above normal being passed directly onto American families are not acceptable,” Biden wrote in letters to executives at Shell, Exxon Mobil and other companies.

“Amid a war that has raised gasoline prices more than $1.70 per gallon, historically high refinery profit margins are worsening that pain,” he wrote.

On Saturday, the US national average price of gasoline reached the $5 mark for the first time in US history as inflation hit a 41-year high of 8.6 percent in May.

Average price for a gallon of gas tops $5 for the first time in history

The US national average price of gas hit $5 for a gallon of regular for the first time in history as inflation continues going up in the United States.

The increasing gas prices, which have been exacerbated by the Ukraine conflict, is a major political liability for Democrats ahead of the fall midterm elections. 

One Democratic strategist said the soaring costs need to be handled or Democrats would pay heavily at the polls.

“I know we’re still months out but everyone is hurting and people are blaming Democrats for this,” the strategist said. “Trump was insane, but people weren’t facing this kind of economic turmoil and this is the kind of stuff that voters deeply care about.”

The Biden administration has limited options when it comes to relieving soaring gas prices and inflation more broadly.   

Meanwhile, the Federal Reserve, which plays the primary role in responding to inflation, announced Wednesday a 0.75 percentage-point increase in interest rates – the largest hike since 1994 – in a bid to quash inflation.

Speaking to reporters, Federal Reserve Chairman Jerome Powell said that the Fed cannot do much to affect energy and food prices. 

“We at the Fed understand the hardship inflation is causing,” he said. “Inflation can’t go down until it flattens out. That’s what we’re looking to see.”

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