Biden readies new action on gasoline prices

President Joe Biden is readying a speech for 19 October that will outline more plans for bringing down domestic gasoline prices he says remain too high for consumers, the White House said.

The administration for weeks has teased that it would likely release more crude from the US Strategic Petroleum Reserve (SPR) as part of a 180mn bl emergency drawdown launched in response to Russian president Vladimir Putin's invasion of Ukraine. Biden plans to announce further actions that will "make sure that he lowers cost," the White House said today.

"This is something he has done throughout the summer, this is something he has done to address Putin's price hike," the White House said.

The administration has already scheduled the drawdown of 165mn bl of crude from the SPR through a series of sales this summer. That leaves open the possibility of an upcoming sale of up to 15mn bl of additional crude under Biden's original order approving the drawdown.

The US is separately required under existing laws to sell an additional 26mn bl of crude from the SPR by 30 September 2023, but the White House has been asking Congress for flexibility to defer those sales if warranted.

The White House has credited this summer's unprecedented withdrawal of crude from the SPR for a decline in gasoline prices throughout the summer, after reaching a record high of $5/USG for regular grade. US gasoline prices began climbing again last month but last week fell to $3.87/USG for regular grade in the week ending 17 October, according to the US Energy Information Administration.

Republican lawmakers have accused Biden of using the emergency crude reserve for political purposes ahead of the midterm elections on 8 November, in an attempt to ease voter concerns about inflation. The White House said Biden was fulfilling a promise to do "everything he can to lower prices" for consumers because the war in Ukraine is continuing to put pressure on global energy supplies. The Opec+ decision this month to cut production quotas is also threatening to raise prices, leading the administration to say it will reassess its relationship with Saudi Arabia

Another potential option for the administration to try to address energy prices would be seeking emergency restrictions on exports of petroleum products. US oil industry groups heavily oppose such restrictions. The White House has declined to take any options off the table, but administration officials have focused public remarks on the ability to release crude from the SPR.

The US also has strategic reserves of 1mn bl of gasoline and 1mn bl of ultra-low sulfur diesel located in the northeast US that it can release during emergencies. The diesel reserve was tapped once, after Hurricane Sandy in 2012.

US deputy energy secretary David Turk said earlier this month the administration has had extensive conversations about its options, "... on what are the right tools to deploy, when would we deploy them, what are the pros, what are the cons."

The SPR, which consists of underground salt caverns at four facilities in Texas and Louisiana, held 405.1mn bl of sweet and sour crude as of 14 October, according to the US Energy Department, the lowest level since 1984.

By Chris Knight