WASHINGTON (Nexstar) — As the Federal Reserve announces the biggest interest rate hike in almost 30 years, President Biden says part of the reason Americans are paying such high prices at the pump is that oil refineries are taking advantage of people.
Biden says oil refineries are exploiting the war in Ukraine, saying that refineries’ profits have tripled since the war started.
“The price of oil globally is about $120 per barrel, and the last time it was that price globally, we were paying $4.25 at the pump,” said Bharat Ramamurti of the National Economic Council.
But right now Americans are paying an average of $5 per gallon. Ramamurti says that’s because oil refineries are making historically high profit margins. Maryland Senator Chris Van Hollen says that’s a problem.
“In my view, they are engaged in war profiteering and they’re not using the excess profits to reinvest in production, they’re using them for stock buybacks,” Van Hollen said.
In a letter calling on oil refineries to produce more gasoline and diesel, Biden said he’s prepared to use emergency authority to force an increase in output.
“Why would somebody build a refinery or operate at this point? And that’s the challenge with the refinery capacity,” said Florida Senator Marco Rubio.
Republicans say Democrats’ push to shift the country to clean energy is behind the high oil prices.
“It’s being fueled in large part by Democrat’s huge mistakes,” said Senate Republican leader Mitch McConnell.
The three-quarter percent interest rate hike was made by the Federal Reserve to combat rising prices. It’s the largest increase since 1994, and Federal Reserve Chairman Jerome Powell said more interest rate increases can be expected.
“We’re strongly committed to bringing inflation back down and we’re moving expeditiously to do so,” Powell said.
Chair Powell also said real GDP growth has picked up this quarter, and the overheated housing market also started to cool off, in part because mortgage rates have been slowly rising.