Rising Gasoline Prices: Refineries Without a Miracle Solution

After accusing refiners of making hefty profits at the backs of motorists, the Biden administration struck a more conciliatory tone on Thursday, urging industry leaders to ramp up production to cut gas mileage without offering concrete solutions for now Find.

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Soaring prices at the pump, a symbol of the general rise in prices, are weighing on the popularity of the Democratic president, who regularly criticizes the oil giants for getting rich without addressing the problem.

Secretary of Energy Jennifer Granholm “made it clear (to representatives from seven major refiners in the United States) that the government believes it is imperative that companies increase production,” according to a report of the meeting broadcast by her services.

They discussed various solutions, including better preparing East Coast refineries for hurricane season.

However, no concrete measures have been announced.

It was “a first step,” White House spokeswoman Karine Jean-Pierre said at a briefing. “Obviously we want to come to solutions and it will take several steps to get there.”

When asked about the idea of ​​a possible moratorium on the export of refinery products manufactured in the USA, which had been circulating in the run-up to the meeting, “the decision had not yet been made,” said the spokeswoman.

Overall, however, the discussion was “constructive”, according to the two major organizations in the industry, API and AFPM, in a press release.

The minister “adopted a cooperative tone from the start, recognizing that the oil market is inherently global and that certain companies, including Shell, have reduced their refining capacity” in order to be able to produce more biofuel, the Shell USA chief added . Gretchen Watkins.

Greg Garland, CEO of Philipps66, hailed “a great start” while his Chevron counterpart, Mike Wirth, spoke of “constructive discussions”.

The latter had criticized the president on Tuesday for “denigrating” the sector. A criticism was then swept away by Joe Biden, who found him “slightly touchy.”

The US President, who attended a meeting Thursday on wind energy but not the one with the oil majors, wrote to ExxonMobil, Chevron, Philips66, BP, Marathon, Valero and Shell last week to urge them to take “immediate” action .

Achieving “historically high” margins by letting the Americans pay was “unacceptable,” he accused at the time.

The oil sector had counterattacked, notably replying that US refineries were already at 94% capacity.

Ahead of Thursday’s meeting, nearly 30 sector organizations also invited Joe Biden to visit wells, refineries and pipelines in the United States before he was due to travel to the Middle East in July, where he was expected to try to persuade the Saudis to pump more.

Solutions “are under our feet, and we urge you to reconsider the immense potential of America’s oil and gas resources,” they wrote in a letter.

Industry experts didn’t really expect big breakthroughs.

“If refiners could produce more now, they would do so because of the incredible margins they can make,” said Andrew Lebow of the Commodity Research Group.

Perhaps production will ramp up a bit in the coming weeks once some operational issues are resolved, he said. He predicts that prices will fall again somewhat, but will remain at a high level.

Oil prices were boosted by a sharp rebound in demand after the Covid-19 pandemic and then sanctions against Russia, a major crude oil producer, after invading Ukraine.

A gallon of gasoline in the United States climbed above the symbolic $5 per gallon mark for the first time in early June. Since then, it has declined somewhat but remains a far cry from the $3 seen a year ago.

In a bid to lower prices at the pump, Joe Biden on Wednesday asked Congress to temporarily suspend the 18-cent state gas tax this summer, a request that raised skepticism among many experts that the move would only increase demand.

Even limited, this measure would give motorists “a little breather,” the White House spokesman assured on Thursday.

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