President Biden Releases More Oil Into Market, Warns Of Price Gouging While Experts Differ On Impact In Pittsburgh
PITTSBURGH (KDKA) - Rising gasoline prices over the last few months could be halted if President Joe Biden's actions announced Tuesday work.
"Oil-producing countries and large companies have not ramped up the supply of oil quickly enough to meet the demand," says the President.
It's that old supply and demand equation.
More people are driving than ever, but the OPEC countries and American oil producers are not keeping up with the need, so gasoline prices rise.
"You have producers that benefit greatly from rising prices and then you have all the consumers who are harmed by it," says University of Pittsburgh Professor Jeremy Weber.
That's why the president said he will release into the market a record 50 million barrels of oil from the nation's Strategic Petroleum Reserve, and then he added a warning to oil producers.
"Gas supply companies are paying less and making a lot more. They do not seem to be passing it on to consumers at the pump," says Biden.
"That's why I've asked the Federal Trade Commission to consider whether potentially illegal and anti-competitive behavior is causing higher prices for consumers," the president added.
Energy expert Don Bowers, retired from the local gasoline business, does not think local gas dealers are price gouging.
"They are not gouging, no gouging at all, unless it's from the major oil companies coming on down, and I don't think they are either," Bowers told KDKA money editor Jon Delano.
Bowers does not think local prices will drop much and could still edge up more over the holidays.
Delano: "Does this have an impact on local gasoline prices?"
Bowers: "Not at all. That kind of volume will be dispersed within days. It's really ridiculous for these presidents when they come into a problem like this to go to the Strategic Oil Reserve. The Strategic Oil Reserve is for that, strategic oil reserves if in an emergency we need it. This is not an emergency."
But Patrick De Haan, the head of research for Gas Buddy, is more optimistic.
"I do think there will be some measure of relief in the weeks ahead. I think it's possible that average gas prices in Pittsburgh could decline 5 to as much as 15 cents a gallon. Now if we're lucky, we could overshoot that. I think we'll get at least 5 cents of relief, probably closer to 10 or 15, maybe even 20 in the weeks ahead," predicts De Haan.
While gas prices here still seem to be around $3.55 a gallon, Gas Buddy reports some local pumps at $3.29. For even lower prices, jump across the border to Ohio where prices are about $2.84 a gallon.
Bottom line: Nobody is certain whether this action by President Biden will ease gas prices, but the White House was under pressure to do something, so Biden did what Trump, Obama and Bush also did to deal with shortages.
