The U.S. Oil & Gas Association (USOGA) mocked Democrat President Joe Biden over the weekend after the wildly unpopular president demanded that privately-owned gas stations lower their prices and that they “do it now.”
“My message to the companies running gas stations and setting prices at the pump is simple: this is a time of war and global peril,” Biden tweeted. “Bring down the price you are charging at the pump to reflect the cost you’re paying for the product. And do it now.”
“Working on it Mr. President,” the USOGA responded. “In the meantime – have a Happy 4th and please make sure the WH intern who posted this tweet registers for Econ 101 for the fall semester…”
Working on it Mr. President. In the meantime – have a Happy 4th and please make sure the WH intern who posted this tweet registers for Econ 101 for the fall semester… https://t.co/6yLpbDDRKc
— US Oil & Gas Association (@US_OGA) July 3, 2022
Biden’s claim comes after NBC News reported earlier this year that gas stations make “15 cents a gallon on average, according to the National Association of Convenience Stores.”
The cost of gasoline has been increasing for most of Biden’s presidency as his administration has continued to block drilling efforts. A new report from The Wall Street Journal detailed how the far-left administration “plans to block new offshore oil drilling in the Atlantic and Pacific oceans.”
Amazon founder Jeff Bezos, one of the most successful businessmen in history, also mocked Biden for the tweet, writing: “Ouch. Inflation is far too important a problem for the White House to keep making statements like this. It’s either straight ahead misdirection or a deep misunderstanding of basic market dynamics.”
White House press secretary Karine Jean-Pierre tried to clap back at Bezos on Twitter, writing: “Oil prices have dropped by about $15 over the past month, but prices at the pump have barely come down. That’s not ‘basic market dynamics.’ It’s a market that is failing the American consumer.”
“But I guess it’s not surprising that you think oil and gas companies using market power to reap record profits at the expense of the American people is the way our economy is supposed to work,” she continued.
The Federal Reserve Bank of Dallas noted that gas prices remaining high despite a slight decrease in the price of a barrel of oil can be “attributed to events in the U.S. retail gasoline market beyond the control of oil producers.”
The institution added:
Moreover, the asymmetry of the response of retail gasoline prices need not be evidence of price gouging. One potential explanation is that station operators are recapturing margins lost during the upswing, when gas stations were initially slow to increase pump prices. The reluctance to lower retail prices also likely reflects concerns that oil prices—and, hence, wholesale gasoline prices—may quickly rebound, eating into station profit margins.
Another possible reason for this asymmetry is consumers’ tendency to more intensively search for lower pump prices as gasoline prices rise than when they decline. This diminished search effort provides further pricing power to gas stations, causing prices to fall more slowly than they rose. This has prompted researchers to liken the response of gasoline prices to higher oil prices to a rocket—and the response to lower oil prices to a feather.
Yet another potential explanation for this asymmetry is that seasonal demand tends to increase as the weather warms, supporting higher retail prices.