Federal Reserve Economists Destroy Biden’s Excuse of ‘Oil Companies Profiteering’ for Skyrocketing Gas Prices – Opinion

It is possible to know everything.Anything about the Democrat Party and Joe Biden, it’s that Democrats gonna Democrat and Biden gonna Biden. It is also known that Democrats Democratting and Biden Bidening include creating crises. When the polls turn south, Republicans, billionaires and other evil corporations are blamed.

Case in point: The Biden Oil Crisis™, which was soon followed, of course, by Biden Gas Price Hikes™.

“Shockingly,” that’s not how Biden and the Democrats see it.

Nope, skyrocketing gas prices are the fault of oil-company “profiteering” — a favorite go-to bogeyman of Democrats. And laugh-out-loud ridiculous, Vladimir Putin, as in “Putin’s price hikes.”

So naturally, as gas prices across the country hit new record highs this week, Biden and the Democrats again busted out the worn-out “oil and gas companies are profiteering” talking point and miraculously found a way </sarcasm> to recycle it back into the national conversation — with the liberal media sock puppets again leading the charge.

The New Yorker had an Op-Ed entitled “Clockwork” that ran in the New Yorker. As Gas Prices Reach New Highs, Oil Companies Are Profiteering, in which the left-wing rag claimed “the Biden White House is confronting a form of shareholder capitalism that has no place for modest profits or rallying around Ukraine.”

A.A.A. has reported that crude oil prices have risen more than $100 a barrel in the past year. According to ExxonMobil, the national average gas price hit a record $4.37/gallon last week. ExxonMobil earned $5.5 Billion after taxes in the first three months 2022; Chevron made $6.3 billion while ConocoPhillips took $5.8B.

The small-scale energy producers in the U.S., often called wildcatters and concentrated there, also enjoy huge profits. Marathon Oil and Pioneer Natural Resources both reported earnings last week of $1.3 billion in their first quarter.

Beautifully (as if for this conservative political pundit’s benefit), The New Yorker even shared quotes from Biden, including the following, from March:

The CEOs of major oil companies have said they’ll increase investment and production. They can do it. My message is: it’s time—in this time of war, it’s not a time of profit. It’s time for reinvesting in America.

But alas, The New Yorker lamented, flying wingman: “Overall U.S. oil production is still running far below its pre-pandemic level. In February 2020, U.S. oil fields generated around thirteen million barrels of crude a day; last month, they produced less than 11.9 million barrels a day.”

And while we’re at it, the piece also quoted Biden blaming the Republicans: “They have no plan to bring down energy prices today, no plan to get us to a cleaner, energy-independent future tomorrow.”

Just one problem with “all of the above.”

As reported by Breitbart News on Friday, economists at the Federal Reserve of Dallas this week published an analysis debunking the Democrats’ “profiteering” excuse for high gas prices. Senior economic analysts Garrett Golding and Lutz Kilian explained that profiteering and price gouging are Not contributingThe staggering cost of gasoline

Although U.S. retail gasoline price in most regions has remained high since March 2013, this is due to frictions within the market and not the oil supply.

Um, Joe?

Golding, Kilian and others explained two specific facts which disprove the Democrat myth.

Prices are set by gas station owners “Gas station operators set retail prices based on their expected acquisition cost for the next delivery of fuel from the local distributor, federal and state tax rates, and a markup that covers operating expenses, such as rent, delivery charges and credit card fees.”

A company owns nearly every gas station that doesn’t produce oil. “Since only 1 percent of service stations in the U.S. are owned by companies that also produce oil, U.S. oil producers are in no position to control retail gasoline prices.”

I’ll try to avoid the deep weeds, here, but according to Golding and Kilian, the cost of crude oil accounts for roughly 59 percent of the price of gasoline, so a 34 percent increase in the price of oil should reflect a 20 percent increase in the retail price of gas.

Their analysis also shows that a 22% drop in oil costs should lead to a 13% decrease in pump prices. But, this has not been the case at national levels.

Moreover, the analysts said, the asymmetry of the response of retail gasoline prices does not provide evidence of price gouging — another favorite Democrat charge.

Finally, one potential explanation, according to Golding and Kilian, is station operators are recapturing margins lost during the upswing — when gas stations were initially slow to increase pump prices. This may be due to concerns about rising oil prices and consequently, higher wholesale gasoline prices. Station profit margins could also be affected by this reluctance at lower retail prices.

Bottom line:

Democrats gonna Democrat and Biden gonna Biden. The hypocrisy displayed by the left is unstoppable. From the Biden Oil Crisis to the Biden Border Crisis to the Biden Afghanistan Debacle to the Biden Supply Chain Crisis, Bidenomics, Bidenflation, and Biden Gas Prices Hikes, nothing — as in zero — is ever Biden’s fault.

It is, however. It’s all there.

RedState is related to:

Biden’s Plan to Reduce Gas Prices Proves to Be a Miserable Failure

Joe Biden Has a Problem With Facts – We Produce LESS Oil Not More Than Under Trump

Biden considers killing another US pipeline as the oil crisis continues