After a week of contentious back-and-forth with industry officials, the Biden administration has called the chiefs of seven major oil refining companies to Washington as part of a range of moves this week on gas pricing.
After the president recently criticized their high earnings as “not acceptable” in a letter to the businesses, the CEOs will meet with Energy Secretary Jennifer Granholm. In one retort, Chevron (CVX) argued that Washington’s strategy was really to blame for the high costs.
However, the advisors to President Joe Biden said they hope for a fruitful discussion.
White House senior adviser Gene Sperling said on Wednesday on Yahoo Finance Live, “Let’s put every proposal on the table so this is not the president just scolding. The goal is outcomes, he continued, and Biden will be “providing a harsh message to everyone to do everything you can.”
According to the most recent data from the American Automobile Association, petrol prices are currently sitting at about $5 per gallon, having increased significantly in recent months. A number of causes, most notably the interruptions in the world oil markets as a result of Russia’s invasion of Ukraine, have contributed to the hikes.
The firms under scrutiny, in addition to Chevron, are Marathon (MRO), Valero (VLO), ExxonMobil (XOM), Phillips 66 (PSX), BP, and Shell. All of these corporations received a letter from the president last week (SHEL).
According to Yahoo Finance Jennifer Granholm, the US Energy Secretary, gave a preview of her planned meeting with oil executives on June 22 at the White House. (Drew Angerer/Getty Pictures) )
In a speech on Wednesday, Biden—who is not expected to attend the meeting—said, “I hope they’ll come up to the table with some meaningful ideas and actual steps in the short term.”
“We need an open conversation,”
The White House is primarily urging businesses to relieve what they perceive to be a refining bottleneck, the stage between the production of crude oil and the gas pump. According to the administration, some refining capacity was shut down during the pandemic and hasn’t been restored swiftly enough.
Chevron attributes the issues to rules and a lack of direction from DC. Chevron CEO Michael Wirth, who will be present, recently remarked, “We need an honest debate.
The amount of flexibility that oil corporations actually have and how swiftly things could shift in the short term have also been questioned by industry experts. They observe that in recent weeks, crude processing has been operating between 93% and 94% of its theoretical maximum operable capacity.
We intend to have a serious discussion about this. When asked what she would do if the refiners “don’t play ball,” Granholm responded in a press conference, “Let’s see how that conversation goes. She is not completely ruling out using the Defense Production Act to compel oil corporations to increase production, which might eventually drive down prices.
In a statement announcing the hearing, a senior administration official expressed the expectation that it would cover “ways the federal government can be helpful to bring that additional capacity online as rapidly as feasible.”
According to oil experts, prices will likely decline in the coming days as a result of market forces. This might perhaps reduce tensions at the meeting with business executives.
Sperling shared the Biden team’s optimism that bringing everyone together may result in advancement. He emphasized, though, “I don’t think people should be outraged because the president is standing up for consumers who are being squeezed at the gas pump.
Washington, DC-based writer and producer Ben Werschkul works for Yahoo Finance.
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