President Joe Biden recently met harsh criticism after he called on oil companies to reduce gas prices. | whitehouse.gov
President Joe Biden recently met harsh criticism after he called on oil companies to reduce gas prices. | whitehouse.gov
President Joe Biden accused oil companies of gouging customers at the pump in a tweet July 2.
The tweet has met some harsh criticism, as the Wall Street Journal Editorial Board said it “willful ignorance” of the economy. Since large oil refiners "own fewer than 5% of all gas stations in America. Over “60% of single stores are reportedly operated by individual families, with the rest being independently owned and operated by chains or grocery stores selling fuel.”
Biden’s tweet called for an immediate reduction in gas prices across the nation.
"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 said in his tweet. “Bring down the price you are charging at the pump to reflect the cost you’re paying for the product. And do it now."
Large refineries own a small portion of gas stations in the United States and most station owners make just a few cents per gallon on gas sold, according to the WSJ. Most of their profits come from the sale of food and cigarettes.
Fewer people are visiting gas stations and many who purchase gas are doing so in less amounts, according to the National Association of Convenience Stores. This has caused many store owners to struggle financially, the WSJ reported. If retailers sold fuel at cost, most would likely go out of business.
Many large refiners abandoned the retail business in the 2000s due to slim profit margins, the editorial stated. The U.S. Energy Information Administration (EIA) said distribution and marketing made up approximately 5% of the price of gasoline in May, or about 22 cents per gallon. That amount covers the cost of freight, labor, utilities, real estate, and credit-card fees.
On multiple occasions, the board stated, Biden has repeatedly "accused oil and gas companies of price gouging and demanded that they increase production even while his administration threatens to put them out of business,” the WSJ reported. Biden “continues to be ignorant about the fact that businesses make long-term decisions based on demand expectations and policy signals."
The average Arizonan is paying $1,034 more per gallon of gas when compared to last year, according to the latest data from the Gas Misery Index. The average price for a gallon gas in Arizona July 5 was $5.15, according to the American Automobile Association.
Alerts Sign-up