President Joe Biden is blaming oil companies for the high prices consumers have been paying at the pump the last few months. | Wikimedia Commons/Airman 1st Class Andrew Lee
President Joe Biden is blaming oil companies for the high prices consumers have been paying at the pump the last few months. | Wikimedia Commons/Airman 1st Class Andrew Lee
The Wall Street Journal Editorial Board is taking President Joe Biden to task over claims that he isn’t cognizant of how gas prices are determined.
On July 2, President Biden tweeted, ordering gas stations to lower their prices: "My message to the companies running gas stations and setting prices at the pump is simple: This is a time of war and global peril. Bring down the price you are charging at the pump to reflect the cost you’re paying for the product. And do it now."
The WSJ Editorial Board claims the president's tweet "betrayed a willful ignorance about the private economy," since large oil refiners "own fewer than 5% of all gas stations in America." The article states that roughly 60% of gas stations in the country are owned by individual families, with the rest being independently owned and operated by chains or grocery stores.
"It’s embarrassing for the leader of the free world to sound like he’s channeling Hugo Chavez," the WSJ Editorial Board said.
WSJ stated that gas stations make profit through customers who buy merchandise inside the store and only make a few cents of profit on a gallon of gas. With motorists fueling up less in recent months, members of the National Association of Convenience Stores are reporting that they are struggling to stay afloat.
A large number of refiners left the retail business in the last 20 years due to thin profit margins. According to WSJ, the Energy Information Administration (EIA) says distribution and marketing made up approximately 5% of the price of gasoline in May, or about 22 cents per gallon. This reportedly covers the cost of freight, labor, utilities, real estate and credit card fees.
Biden's most recent display of economic ignorance isn’t a one-off, as WSJ points out. Rather, the president has repeatedly "accused oil and gas companies of price gouging and demanded that they increase production, even while his administration threatens to put them out of business" in recent months. WSJ says Biden continues to be ignorant about the fact that "businesses make long-term decisions based on demand expectations and policy signals."
Michigan's gas average as of July 5 is $4.93 per gallon, according to AAA. Michigan families are spending $963 more annually on gas compared to this time last year, according to the latest data from the Gas Misery Index.
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