Jeff Bezos criticises Joe Biden for calling on fuel companies to lower prices at the pump

Billionaire accuses the White House of having a 'deep misunderstanding' of the market

A petrol station in California displays fuel prices in June. Fuel prices in the US have more than doubled since January. EPA/JOHN G.  MABANGLO
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Jeff Bezos, the billionaire founder of Amazon, criticised US President Joe Biden for calling on oil companies to lower fuel prices, the second time he has accused the US leader of “misdirection” in the fight against rising inflation.

Mr Biden, a vocal critic of the huge profits that oil and gas companies are making amid surging oil prices, took to Twitter on Saturday to urge companies running filling stations to lower pump prices during a “time of war and global peril”.

In response, Mr Bezos said on Twitter that the White House has a “deep misunderstanding” of the market, blaming the administration of not addressing the issue of inflation.

Washington is struggling to contain rising consumer prices — which are at 40-year highs — in the world's biggest economy, which have been exacerbated by the Russia-Ukraine conflict.

Average petrol prices in the US stand at about $4.80 a gallon, or 4.54 litres, according to data from the AAA motoring website, more than doubling from January amid rising oil prices globally, years of underinvestment in the energy industry and a lack of US crude refining capacity.

Last month, Mr Biden called on Congress to enact a three-month federal petrol and diesel tax holiday and also urged states to provide more relief for drivers by suspending their state fuel taxes.

On Sunday night, White House press secretary Karine Jean-Pierre hit back at Mr Bezos, saying oil prices had dropped by about $15 over the past month, with the market “failing the American consumer”.

“But I guess it is 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 said.

This is the second time Mr Bezos has criticised Mr Biden of “misdirection”. In May, Mr Bezos responded to a tweet from Mr Biden, who said inflation could be controlled by making big companies “pay their fair share”.

The US Federal Reserve has been taking steep measures to tackle inflation and increased its target interest rate by three quarters of a percentage point last month — the biggest rise since 1994.

It has also pledged to do “whatever it takes” to temper rising prices in the world's biggest economy, which analysts say faces the risk of recession due to the Fed's aggressive plans for interest rate increases.

Fed chairman Jerome Powell has already issued a warning “that the Fed is willing to tolerate some pain in order to bring inflation lower”, Naeem Aslam, chief market analyst at Dublin-based Avatrade, wrote in a note on Monday.

“Many investors believe that the interest rate in the US could reach 2.5 per cent to 3 per cent by the end of this year, and that could be the cut-off point for the Fed”, Mr Aslam said.

“However, it is important to note that the last time the Fed increased the interest to this level of 3 per cent, inflation was running around 4.3 per cent. And now US inflation readings are at 8 per cent, which means that the chances of the Fed backing off from hiking interest rate are remote.”

Updated: July 04, 2022, 7:36 AM