Wednesday 17th November 2021
Suspected illegal practices
Biden suspects price gouging for oil and gas
US President Biden is under pressure in the face of falling polls and rising inflation. Now he wants to take a close look at the energy companies: Although their costs are falling, they are constantly increasing their prices. Biden suspects illegal practices behind this.
US President Joe Biden wants to investigate, in view of the rapidly increasing energy prices, whether companies in the oil and gas industry are ripping consumers off. In a letter to the head of the FTC Trade Commission, Lina Khan, Biden called for an investigation into potentially illegal practices. Despite falling costs for companies, Americans were paying significantly more at the petrol pumps, the letter said. The FTC should begin “immediately” to investigate signs of price gouging.
“I do not accept that hard-working Americans pay more for gasoline because of consumer-hostile and potentially illegal behavior,” said the US president. The two largest oil and gas multinationals in the USA are in the process of doubling their net profits compared to 2019 – i.e. before the pandemic. In addition, they have announced plans for multi-billion dollar share buybacks and dividend payments. Biden did not mention the corporations by name. But it’s no secret that ExxonMobil and Chevron are the US market leaders.
It remains to be seen whether companies have much to fear. The FTC initially made no comment. The agency is independent and not subordinate to the White House. Biden is under pressure in the face of high inflation and falling approval ratings among the population. The appeal to the competition guardians is likely to be primarily a symbolic gesture. Investors remained calm – the shares of Exxon and Chevron, which have been up 57 percent and 37 percent respectively since the beginning of the year, initially did not react.