Joe Biden Pokes Exxon Mobil Over Gas Prices After May CPI Inflation Report

President Joe Biden on Friday criticized Exxon Mobil for what he described as the oil giant’s greedy reluctance to produce more petroleum, just hours after US economists said inflation rose in May to levels not seen since the early 1980s. more had been seen.

When asked by a reporter whether his administration has plans to “go” oil company profits, Biden launched a verbal attack on Exxon, one of the world’s largest oil producers. Gas prices have played a major role in rising costs for consumers.

“Why don’t you tell them what Exxon’s profit was this quarter?” Biden advised the reporter. “Exxon made more money than God this year.”

Speaking from Los Angeles, Biden went on the offensive during a press conference aimed at tackling the Labor Department’s monthly consumer inflation report released earlier Friday. Government economists found that prices rose by 1% between April and May. The jump last month pushed the national year-over-year price increase to 8.6%, the highest rate since 1981.

Talking about broader inflation trends, Biden again blamed Russian President Vladimir Putin and Russia’s invasion of Ukraine for record high gasoline prices. The national average price for a gallon of regular gasoline hit a new record Friday at $4,986.

The president also blamed Exxon and other oil producers for what he called a failure to increase supply to lower prices.

“One thing I want to say about the oil companies: they have 9,000 licenses to drill. They don’t drill,” he continued. “Why aren’t they drilling? Because they’re making more money and not producing more oil — the price is going up.”

The second “reason why they don’t drill is because they buy back their own shares,” Biden said. “They are buying back their own shares and not making any new investments.”

US President Joe Biden speaks during a visit to the Port of Los Angeles, during the Ninth Summit of the Americas in Los Angeles, California, USA, June 10, 2022.

Kevin Lamarque | Reuters

Exxon, the largest US oil producer, announced in April that it plans to triple the size of its share buyback program and buy back up to $30 billion worth of shares by the end of next year. The total compared to previous estimates for $10 billion in repurchases.

In the first three months of 2022, Exxon paid out $5.8 billion to shareholders, including $3.8 billion in dividends and $2.1 billion in share repurchases.

The president concluded with a specific directive to the petroleum producer: “Exxon: Start investing, start paying your taxes.”

Exxon Mobil did not immediately respond to CNBC’s request for comment. Industry officials say Biden’s tough stance on oil and gas during his 2020 campaign and his presidency has cooled relations between the White House and producers.

They also deny the government’s claim that they would take advantage of the global crisis, such as the war in Ukraine, to push prices up.

Lem Smith, the vice president of federal relations at the American Petroleum Institute, wrote last week that the White House has failed to provide a viable plan to boost domestic production.

“The Biden administration has failed to put forward an agenda that translates into taking clear, demonstrated action to — in President Biden’s words — ‘tackling inflation,’” Smith wrote for the industry’s powerful lobby group.

Smith also said Biden’s moves to release barrels of oil from the Strategic Petroleum Reserve and offer renewable energy tax credits are “like band-aids when major surgery is needed.”

Biden has been trying to keep inflation in check as the issue is a high priority for voters ahead of the November midterm elections. Before speaking in Los Angeles, Biden acknowledged the pain caused by inflation and pushed for several general policy solutions.

“Make no mistake: I understand that inflation is a real challenge for American families. Today’s inflation report confirms what Americans already know: Putin’s price hike is hitting America hard,” Biden said in a statement. “My administration will continue to do everything it can to lower prices for the American people.”

Biden called on Congress to pass legislation to cut shipping, prescription drugs and energy, and praised efforts to ramp up U.S. oil and gas production. At the same time, he warned energy managers in a statement against misusing a contraction in global oil supply “as a reason to make matters worse for families with excessive profit-taking or price hikes”.

Economists say that while the president and his economics team are doing everything they can to boost the supply of goods and services, ordinary Americans will likely have to wait a while for price increases to subside.

The Federal Reserve, the US central bank responsible for managing inflation, has begun raising interest rates and withdrawing Covid-19 incentives in an effort to control consumer and business demand for loans.

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