September 18, 2023 [Reuters]- The U.S. Energy Department has talked to oil producers and refiners to ensure stable fuel supplies at a time of rising gasoline prices, Jared Bernstein, head of the White House Council of Economic Advisers, said on Wednesday.
Rising gasoline prices were largely behind the largest increase in U.S. consumer prices in 14 months in August.
“The Energy Department is in touch with producers and refiners to resolve any issues and to try to ensure stable supply,” Bernstein told reporters on Wednesday.
Officials from President Joe Biden’s administration reached out last week to oil industry companies to assess inventory levels and learn of any planned shutdowns of refineries, after Saudi Arabia and Russia extended voluntary oil output cuts to the end of the year, a U.S. refining source involved in the talks told Reuters.
“The White House wants to make sure everyone is focused here on potentialities for systemic disruptions that could create a supply problem,” said the source, who is not authorized to speak publicly about internal discussions.
Gasoline prices jumped 10.6% in August after climbing 0.2% in July, accounting for more than half the increase in the Consumer Price Index.
They peaked at $3.984 per gallon in the third week of August, according to data from the U.S. Energy Information Administration, up from $3.676 per gallon during the same period in July.
Gasoline prices are expected to rise further in some regions during US refinery maintenance this autumn, especially given the additional impact of Saudi Arabia’s extended production cuts on crude oil prices.
The Energy Department did not immediately respond to requests for comment.
The American Petroleum Institute, the top U.S. oil lobby group, said the Biden administration has “taken every opportunity to restrict production both now and in the future.”
“This administration has delayed a 5-year program for offshore exploration, stymied infrastructure development, removed millions of acres from leasing in the Gulf of Mexico, and revoked leases in Alaska, all while pushing costly and ineffective policies designed to limit consumer choice. It doesn’t have to be this way,” the group said in a statement.
Last summer, Biden officials held a series of talks with U.S. refiners as inflation was crushing consumers and gas prices hit historic highs. The White House at the time floated ideas like curbing fuel exports and forcing the restart of idle refineries, but those ideas have not been resurrected yet, the source said.
Biden authorized large withdrawals from the nation’s Strategic Petroleum Reserve to combat high prices, leaving it at its lowest level in decades. Tapping it again this year would be a risky move.
The SPR currently holds about 350 million barrels.
The Biden administration has only begun refilling it sporadically and last month pulled back an offer to buy back a batch as oil prices were rising due to the Saudi output cut.
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