Convened on the surge in gasoline, American refiners without a miracle solution

Convened on the surge in gasoline, American refiners without a miracle solution

Soaring prices at the pump, a symbol of the general rise in prices, weighs down the popularity of the Democratic president, who has regularly criticized the oil giants for getting rich without making efforts to solve the problem.

Energy Minister Jennifer Granholm “made it clear (to representatives of seven major refiners in the United States) that the administration believes it is imperative that companies increase production,” according to a report by the meeting, distributed by its services.

They discussed various solutions, including better preparing refineries on the East Coast for the hurricane season.

No concrete action however, has not been announced.

It was “a first step,” commented White House spokeswoman Karine Jean-Pierre during a briefing. “We obviously want to reach solutions, and there are going to be multiple steps to get there. »

Asked about the idea of ​​a possible moratorium on the export of refined products produced in the United States, which was circulating in the run-up to the meeting, “the decision has not been taken”, indicated the spokeswoman. .

But the discussion as a whole was “constructive”, estimated in a press release the two major organizations representing the sector, API and AFPM.

The minister adopted a “collaborative tone from the start, recognizing that the oil market is by nature global and that certain companies, including Shell, have reduced their refining capacity” to be able to produce more biofuel, added the boss of Shell USA, Gretchen Watkins.

Philipps66 CEO Greg Garland hailed “a great start”, while his counterpart at Chevron, Mike Wirth, spoke of a “constructive conversation”.

The latter had criticized the president on Tuesday for “vilifying” the sector. A criticism then swept away by Joe Biden, who found him “slightly susceptible”.

The US president, who took part in a meeting on wind energy on Thursday, but not the one with the oil companies, had written last week to ExxonMobil, Chevron, Philips66, BP, Marathon, Valero and Shell to call on them to take “immediate” measures.

Achieving “historically high” margins by making Americans pay is “not acceptable”, he accused then.

The oil sector had counter-attacked, retorting in particular that American refineries were already operating at 94% of their capacity.

Before the meeting on Thursday, nearly 30 organizations in the sector also invited Joe Biden to come and visit wells, refineries and pipelines in the United States before going to the Middle East in July, where he should try to convince the Saudis to pump more.

Solutions “are beneath our feet, and we urge you to reconsider the immense potential of America’s oil and gas resources,” they wrote in a letter.

Industry experts weren’t really expecting big breakthroughs.

“If refiners could produce more now, they would because of the incredible margins they can make,” said Andrew Lebow of the firm Commodity Research Group.

Perhaps production will increase a little in the coming weeks, once some operational problems are solved, he said. Prices will come back down a little, but will remain at a high level, he predicts.

Oil prices were boosted by a strong rebound in demand after the Covid-19 pandemic, then by the sanctions imposed on Russia, a major crude producer, after the invasion of Ukraine.

The gallon of gasoline in the United States climbed for the first time, at the beginning of June, above the symbolic threshold of 5 dollars per gallon. It has come down a bit since then, but remains far from the 3 dollars of a year ago.

Biden calls for a break on federal gas tax

To lower prices at the pump, the US president on Wednesday (June 22) urged Congress to pass legislation suspending a federal tax on gasoline and diesel for three months, in order to lower prices to the pump.

The pause would save 18 cents per gallon (3.78 liters) of gasoline and 24 cents per gallon of diesel as millions of Americans prepare to hit the road for summer vacation.

The cost of the legislation is estimated at $10 billion, a senior US administration official said on a conference call.

Besides tax exemptions, Joe Biden called on the oil industry to increase its refining capacity. He asked companies that run gas stations and set prices to “lower the price you charge at the pump to reflect the cost you pay for the product.”

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