Biden asks oil refiners to boost production amid massive profits

Facing mounting anger from voters over record petrol prices, US president asks refiners to help

Various grades of petrol, with prices above $7 per gallon, are displayed at a Chevron gas station in downtown Los Angeles, California. AP

Petrol prices are displayed at an Exxon gas station behind American flag in Edgewater, New Jersey. Reuters

Drivers in Hawthorne, California wait in line to pump fuel as the price of regular petrol reaches above $5.89 a gallon and premium fuel tips over $6 per gallon. AFP

'Any good news please' sign seen along with a price for a gallon of petrol at a service station in Denver, Colorado. AP

Two people wearing masks stand in front of a sign showing the price of petrol outside of a service station in Washington. AFP

A sign displays petrol prices as a vehicle departs a Shell station in Washington. AFP

A person takes photographs of petrol prices at a Shell station in Los Angeles, California. AFP

An attendant walks past a pump at a station selling petrol at almost $7 a gallon in Los Angeles, California. AP

A driver holds a fuel nozzle at a Shell station in San Francisco, California. Bloomberg

Two people wearing masks walk in front of a sign showing the price of petrol outside of a station as prices reach record highs in Washington. AFP

An electrical contractor repairs a sign with petrol prices in Los Angeles, California. AFP

Cars drive near a petrol station in Washington. AFP

Petrol prices are advertised at almost $7 a gallon in Los Angeles, California. AP

US President Joe Biden on Wednesday demanded oil refining companies explain why they are not putting more petrol on the market, sharply escalating his rhetoric against the industry as he faces pressure over rising prices.

Mr Biden wrote to executives from Marathon Petroleum Corp, Valero Energy Corp and Exxon Mobil Corp and complained they had cut back on oil refining to pad their profits, a copy of the letter seen by Reuters showed.

Experts say motorists should be aware of the “sweet spot” of their car on longer journeys in top gear. Cars consume more fuel if the speed goes beyond 80 to 90kph because of air resistance. Photo: Unsplash/ Chuttersnap

Using a roof box can increase fuel costs substantially as it disrupts the aerodynamics of the car it is on, making its impact on air resistance greater. Getty Images

Keeping your tyres properly inflated is extremely important. If your tyres are a little bit softer, that will damage your fuel efficiency a lot. Getty Images

In heavy traffic, such as when stuck in a logjam between Sharjah and Dubai, the important thing is to try to maintain a constant speed for optimal fuel consumption. Chris Whiteoak / The National

When in traffic, try to move forward slowly. This way, you may avoid having to use the brakes and wasting the energy used in accelerating if vehicles in front of you halt again. Antonie Robertson/The National

When stuck in a traffic jam, avoid going faster because you will always be stuck behind the car in front of you. This will avoid unnecessary use of the brake and accelerator and save on fuel. Pawan Singh / The National

Petrol prices in the UAE have fallen slightly in May. Prices rose more than 10 per cent in February, a further 10 per cent in March, and then 16 per cent in April as global oil prices surged beyond $100 a barrel. Victor Besa / The National

The letter is also being sent to Phillips 66, Chevron Corp, BP and Shell, an anonymous White House official told Reuters.

“At a time of war, refinery profit margins well above normal being passed directly on to American families are not acceptable,” Mr Biden wrote and added that the lack of refining was driving petrol prices up faster than oil prices.

Energy companies in the US are enjoying bumper profits as the Russian invasion of Ukraine has added to a supply squeeze which has driven crude oil prices above $100 a barrel and as fuel demand has remained robust, despite record-high petrol prices.

Refining capacity in the US peaked in April 2020 at a little less than 19 million barrels per day, as refiners shut several unprofitable facilities during the coronavirus pandemic. As of March, refining capacity was 17.9 million bpd, but there have been other closures announced since.

Refiners are running at near-peak levels to process fuel — currently at 94 per cent of capacity — and say there is little they can do to satisfy Mr Biden's demands.

“Our refineries are running full out,” Bruce Niemeyer, corporate vice president of strategy and sustainability at Chevron, told Reuters on the sidelines of a New York energy transition conference on Tuesday, before Mr Biden’s letter was made public.

The US president said the industry's lack of action is blunting the administration's attempts to offset the impact of oil-rich Russia's invasion of Ukraine, such as releases from the nation's oil reserves and adding more ethanol, which is cheaper, to petrol.

On Friday, the president accused the US oil industry, and Exxon Mobil Corp in particular, of capitalising on a supply shortage to fatten profits.

Mr Biden has been intensifying attacks against oil companies as prices at the pump race to record highs above $5 per gallon and inflation surges to a 40-year record.

Privately, White House officials have been reaching out to refiners to inquire about idled plants and spare capacity and whether there are other ways to increase petrol supply, said two sources familiar with the discussions.