President Joe Biden has assured Americans that prices of gasoline will fall in near future, although it will take time. On November 27, the president wrote on Twitter that his administration would tap US oil reserves to lower the price, and to avoid the risk of a feud with OPEC.
During his visit to Nantucket, the president said that the US made serious efforts to lower the global gasoline prices. However, the Government would lower the price in the US, first. "It will take time, but before long you should see the price of gas drop where you fill up your tank," stressed Biden.
Last week, the US president said that Washington DC would release 50 million barrels of oil reserves, as OPEC was not interested in increasing the production. It may be noted that China, Japan, India, South Korea and the UK have already made a similar move as a part of a coordinated effort to decrease petroleum prices. The move will also ease OPEC's stranglehold, as far as oil supply is concerned. Although the move would not immediately trigger a fall in crude prices, it would become cheaper gradually.
Meanwhile, the omicron variant of the COVID-19 virus has shaken the stock market, with West Texas Intermediate Oil, the US benchmark crude price, closing 13% lower. It is the biggest drop since April 2020. The OPEC and its allies have decided not to increase production, as planned in January, because of the spread of the new variant of the virus. They have also refused to release crude from the reserve.
President Biden is under immense political pressure to check inflation, and to control gasoline prices. The soaring gasoline prices have started creating troubles for the American people, as prices of other products, too, have increased. After the announcement by the president, gasoline prices jumped more than $1 a barrel in the US.
Last week, President Biden announced that more gasoline would be released from the Strategic Petroleum Reserve as a part of his administration's efforts to lower prices. He also expressed hope that the move would address lack of supply around the world. According to sources close to the White House, the President discussed the issue with several other countries, and assured them that Washington DC would try to address the lack of supply. Sources said that the US Department of Energy would soon release 50 million barrels from the Strategic Petroleum Reserve.
Pain at the Pump
Although President Biden is trying to help the global community address oil supply imbalances, he is well aware of the fact that consolidation in the oil and gas sector may lead to anti-competitive practices, which could keep American consumers from benefiting when oil prices would fall. There is a possibility that a decrease in oil prices may not ensure lower prices at the pump. The President asked the Federal Trade Commission to examine the current situation in oil and gas markets, stressing that it would be important to consider "whether illegal conduct is costing families at the pump".