President Joe Biden took aim at oil and gas companies on Twitter Wednesday, saying that oil prices were decreasing and had fallen back to $96 a barrel, but gas prices had not followed.
He tweeted out a chart that compared the average price for a gallon of gasoline using regular fuel to the price for a gallon of oil over the course of February to mid-March.
"Oil prices are decreasing, gas prices should too," the president tweeted. "Last time oil was $96 a barrel, gas was $3.62 a gallon. Now it’s $4.31. Oil and gas companies shouldn’t pad their profits at the expense of hardworking Americans."
Currently, the national average gas price is above $4.27 per gallon, according to the latest data from AAA.
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Gas prices spur inflation surge
Inflation rose to yet another 40-year high in February as the Consumer Price Index (CPI) increased 7.9% annually, according to the latest report from the Bureau of Labor Statistics (BLS). This marked the highest rate increase since January 1982.
On a monthly basis, inflation rose 0.8% from January to February. While the rise of inflation over recent months began after the Fed started to stimulate the economy in response to COVID-19, this month’s increases were driven primarily by rising gas prices, according to the BLS. The gasoline index accounted for about one-third of the monthly inflation increase.
The Russian invasion of Ukraine has continued to put upward pressure on oil prices, which directly impact the price of gas. The Energy Information Administration (EIA) said 56% of the cost of gasoline is the cost of crude oil.
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Are oil companies padding their pockets?
While Biden’s chart appears to support his argument that gas companies are keeping prices high despite sliding oil prices, other charts tell a different story.
The chart the president tweeted used data from Bloomberg. And in response to it, Bloomberg's energy and commodities columnist Javier Blas shared a chart of his own that he said showed a more historical picture of oil and gas prices.
"My chart is nearly as bad as the White House's one – emphasis in nearly!," Blas tweeted. "The point is both are #ChartCrimes. You can fit almost any narrative into a chart."
While the cost of crude oil directly impacts gasoline prices, it is not the only influencing factor, according to the EIA. For example, the rising cost of trucking and labor shortages must also be considered. It’s also worth noting that there is a lag time after oil prices decrease before consumers see it at the pumps since many gas stations take on losses when oil prices rise quickly, according to NewsNation.
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