Let’s call the roll on President Biden’s ideas for slashing high gasoline prices. He tried to lobby the Saudis, to no avail. release of oil from the US Strategic Reserve; The market froze. Attacks oil and gas companies for not doing enough drilling or refining, but it also wants to put those companies out of business.
The weakest effort yet comes—a White House request on Wednesday that Congress suspend the 18.4 percent gallon federal gas tax for three months. That’s long enough to cause the irritation of drivers, er, voters every time they fill up the tank during the summer driving season. Has there ever been a more transparently cynical vote-buying policy exercise? Ah, yes, we forgot to cancel the student-loan.
Democrats have long scoffed at the idea of a gas tax holiday. In 2008, running against John McCain, Barack Obama dismissed it as a political “gimmick”. this spring president
Nancy Pelosic
The idea was snubbed when Democratic senators in the competitive 2022 race backed it. She claimed that oil companies would not provide relief to consumers, and Treasury Secretary Janet Yellen has echoed that view.
Federal gas tax is levied when fuel leaves a refinery or is imported instead of at a point of sale. Therefore, it will take time for the suspension to be filtered for consumers and may be impacted by an increase in the market price of crude oil. If crude oil prices reach $140 a barrel in the coming months and drivers may not even notice the tax holiday.
That’s when the administration tapped the Strategic Petroleum Reserve last autumn as prices hit $3.50 a gallon. The government has since issued about 150 million barrels of crude and intends to auction another 90 million barrels by November.
Yet rising global demand for the fuel has offset the excess supply amid the recovery from the pandemic. And for every barrel the US has issued, China has bought another Russian crude oil at a steep discount to replenish its reserves.
A federal gas-tax holiday could also rob the Highway Trust Fund of nearly $25 billion in revenue, which was supposed to go toward funding last year’s bipartisan infrastructure bill. Mr Biden says Congress should not rob highway funding, but Congress will have to cut spending or look for revenue elsewhere.
In recent months, petrol prices have been rising due to lack of refining capacity. Mr Biden last week ordered US refiners to come up with short-term solutions to increase capacity – otherwise. But Mr Biden will not take regulatory steps to address refinery shortages, such as reducing renewable fuel mandates. He also would not issue an exemption to the Jones Act for the transportation of fuel. He declined to take any action that would challenge the climate lobby.
One result is
LyondellBasell
Despite the industry’s current huge profits, it is not finding buyers for its old Gulf Coast refinery. The refinery plans to close by the end of next year, which could push petrol prices even higher. Mr Biden may help entice a buyer by suspending all policies aimed at penalizing fossil fuels, but he will not.
The gap between fuel demand and supply is not a short-term problem that will disappear with the ceasefire in Ukraine. The International Energy Agency warned last week that “global oil supply could struggle to keep pace with demand next year.”
Exxon Mobil
CEO Darren Woods warned Tuesday that supplies could remain tight for five years. The only good news on the supply side of late has been Mr Biden’s serious concession to meet Saudi Crown Prince Mohammed bin Salman, whom he previously referred to as a “pariah”.
Mr. Biden’s energy policy is a jumble of dissonance. He wants political relief from high gas prices but only to get ahead of the next election. A permanent regulatory holiday is needed to increase domestic supplies to the US oil and gas industry and US consumers. Anything else is a break from reality.
Copyright © 2022 Dow Jones & Company, Inc. All rights reserved. 87990cbe856818d5eddac44c7b1cdeb8
opinion | A Gas Tax Vacation From Reality
President Joe Biden called for a federal gas tax holiday on June 22 at the White House.
photo:
Kevin Lamarck / Reuters
Let’s call the roll on President Biden’s ideas for slashing high gasoline prices. He tried to lobby the Saudis, to no avail. release of oil from the US Strategic Reserve; The market froze. Attacks oil and gas companies for not doing enough drilling or refining, but it also wants to put those companies out of business.
The weakest effort yet comes—a White House request on Wednesday that Congress suspend the 18.4 percent gallon federal gas tax for three months. That’s long enough to cause the irritation of drivers, er, voters every time they fill up the tank during the summer driving season. Has there ever been a more transparently cynical vote-buying policy exercise? Ah, yes, we forgot to cancel the student-loan.
Democrats have long scoffed at the idea of a gas tax holiday. In 2008, running against John McCain, Barack Obama dismissed it as a political “gimmick”. this spring president
Nancy Pelosic
The idea was snubbed when Democratic senators in the competitive 2022 race backed it. She claimed that oil companies would not provide relief to consumers, and Treasury Secretary Janet Yellen has echoed that view.
Federal gas tax is levied when fuel leaves a refinery or is imported instead of at a point of sale. Therefore, it will take time for the suspension to be filtered for consumers and may be impacted by an increase in the market price of crude oil. If crude oil prices reach $140 a barrel in the coming months and drivers may not even notice the tax holiday.
That’s when the administration tapped the Strategic Petroleum Reserve last autumn as prices hit $3.50 a gallon. The government has since issued about 150 million barrels of crude and intends to auction another 90 million barrels by November.
Yet rising global demand for the fuel has offset the excess supply amid the recovery from the pandemic. And for every barrel the US has issued, China has bought another Russian crude oil at a steep discount to replenish its reserves.
A federal gas-tax holiday could also rob the Highway Trust Fund of nearly $25 billion in revenue, which was supposed to go toward funding last year’s bipartisan infrastructure bill. Mr Biden says Congress should not rob highway funding, but Congress will have to cut spending or look for revenue elsewhere.
In recent months, petrol prices have been rising due to lack of refining capacity. Mr Biden last week ordered US refiners to come up with short-term solutions to increase capacity – otherwise. But Mr Biden will not take regulatory steps to address refinery shortages, such as reducing renewable fuel mandates. He also would not issue an exemption to the Jones Act for the transportation of fuel. He declined to take any action that would challenge the climate lobby.
One result is
LyondellBasell
Despite the industry’s current huge profits, it is not finding buyers for its old Gulf Coast refinery. The refinery plans to close by the end of next year, which could push petrol prices even higher. Mr Biden may help entice a buyer by suspending all policies aimed at penalizing fossil fuels, but he will not.
The gap between fuel demand and supply is not a short-term problem that will disappear with the ceasefire in Ukraine. The International Energy Agency warned last week that “global oil supply could struggle to keep pace with demand next year.”
Exxon Mobil
CEO Darren Woods warned Tuesday that supplies could remain tight for five years. The only good news on the supply side of late has been Mr Biden’s serious concession to meet Saudi Crown Prince Mohammed bin Salman, whom he previously referred to as a “pariah”.
Mr. Biden’s energy policy is a jumble of dissonance. He wants political relief from high gas prices but only to get ahead of the next election. A permanent regulatory holiday is needed to increase domestic supplies to the US oil and gas industry and US consumers. Anything else is a break from reality.
Copyright © 2022 Dow Jones & Company, Inc. All rights reserved. 87990cbe856818d5eddac44c7b1cdeb8