President Joe BidenSlammed Exxon MobilOn Friday, he criticized the oil company’s insatiable reluctance of producing more petrol. He said this just hours after U.S. economics stated that May saw inflation rise to levels they have not seen since 1980.
When asked by a reporter whether his administration plans to pursue oil companies’ profits, Biden launched into an attack on Exxon (one of the biggest oil producers worldwide). The rise in consumer costs has been driven by rising gasoline prices.
“Tell them about Exxon’s profit for the quarter.” Biden gave advice to the reporter. According to Biden, Exxon was more successful than God in this financial year.
Biden was speaking from Los Angeles during a press conference to address Friday’s Labor Department monthly consumer inflation report.
The government’s economists concluded that the prices rose by 1 percent between April and May. This month’s jump pushed the national year-over-year price increase to 8.6%This is the highest rate of inflation since 1981.
Exxon rebutted several accusations made by the president.
CNBC’s Casey Norton stated that Exxon Mobil spokeswoman Casey Norton said, “We have been in constant contact with the Administration informing them about our planned investments in increasing production and expanding refining capacities in the United States.”
U.S. President Joe Biden spoke during a visit at the Port of Los Angeles during the Ninth Summit of the Americas, Los Angeles, California. June 10, 2022.
Kevin Lamarque | Reuters
Brian Deese, Biden’s chief economic advisor, met with the chief executives of Exxon and ChevronCNBC was informed by two sources familiar with this matter that the company requested they speak to them. These discussions covered prices, production, and market conditions.
Biden spoke also about inflation trends, and blamed Russia President Vladimir Putin’s invasion in Ukraine for the record high gasoline prices. A gallon of regular gasoline cost $4.986, a record-breaking price.
Exxon, as well as other oil producers, were blamed for fuel prices that are high. This was due to what the president called an inability to raise supply and reduce prices.
One thing that I would like to mention about oil companies is the fact they have 9,000 drilling permits. He continued, “They’re not drilling.” They aren’t drilling, so why? Cause they make more money not producing more oil — the price goes up.”
Biden stated that the second reason they aren’t drilling is because they buy back their stock. “Buying back their stock, and no new investment.”
Exxon, America’s top oil producer announced in April that it intends to tripleThe company plans to repurchase as much as $30 billion of shares through its stock buyback program by next year. This is a decrease from its previous estimates of $10 billion worth of repurchases.
Exxon paid $5.8 Billion to shareholders in the first 3 months of 2022. This includes $3.8 billion in dividends, and $2.1B in stock buybacks.
President Obama concluded with an explicit directive for the producer of petroleum: “Exxon, Start investing and start paying your taxes.”
According to industry officials, the White House’s hardline approach toward oil and natural gas in his 2020 campaign as well as his presidency has strained relations with producers. The administration also denied that it would profit from global crises like the one in Ukraine for price gouging.
Exxon said it would spend 50 percent more on capital in Permian Basin, which is petroleum rich. In addition to this, Exxon plans to expand its refining capacities for U.S. crude oil in order to handle approximately 250,000 barrels per hour more.
Norton claimed that Exxon’s 2021 tax bill was $40.6billion, an increase in $17.8billion over 2020.
Biden’s Friday comments are in direct contrast to Janet Yellen, his Treasury Secretary. Yellen was asked why energy producers had been so reluctant to drill. He replied, “I think it’s beginning to happen now.”
When asked if corporate greed is to blame for the recent rash of inflation she replied that “demand and supply” are what she considers driving it.
I believe it is appropriate to have an antitrust policy. However, I do not believe that inflation is being driven by price increases in certain sectors.
Biden attempted to demonstrate his efforts to reduce inflation before the midterm elections in November. Biden made several policy recommendations before he addressed Los Angeles.
“Make no mistake: Inflation is a challenge for American families,” Biden said. Biden released a statement confirming what Americans know already: Putin’s Price Hike hits America hard. “My administration will do all it can to bring down prices for American citizens.”
Biden requested Congress to approve legislation that would reduce shipping costs and prescription drug prices. Additionally, he praised U.S. efforts to boost oil and gas production. He also warned executives against exploiting a decrease in world petroleum supply as an excuse to “make things worse for families by excessive profit taking and price rises.”
Economists believe that while President Trump and his economic team do everything they can to improve the supply, ordinary Americans will have to be patient for prices to fall.
In an attempt to curb consumer and business demand for loans, the Federal Reserve (the U.S. central bank responsible for managing inflation) has begun to increase interest rates and reduce Covid-19 stimulation.
— Reporting by Kayla Tausche, CNBC