As the powerful Category 4 Hurricane Ian barreled toward southwest Florida on Wednesday afternoon, President Joe Biden warned oil and gas companies not to use the destructive storm as an excuse to hike gas prices, USA Today reported.
“Do not—let me repeat—do not use this as an excuse to raise gasoline prices or gouge the American people,” the president said in a speech at the White House.
“The price of oil has stayed relatively low and kept going down; the price of gas should be going down as well,” he continued.
Biden cited projections from White House experts that only 190,000 barrels of oil in the Gulf of Mexico have been impacted so far by Ian—accounting for only 2 percent of domestic daily production.
“This small, temporary storm impact on oil production provides no excuse for price increases at the pump,” he said.
If gas companies use Hurricane Ian to boost prices at the pump, Biden vowed to ask federal authorities to investigate whether price gouging is occurring.
“America's watching,” he said. “The industry should do the right thing.”
Meanwhile, the American Petroleum Institute, which represents the oil and gas industry, said that “gasoline prices are determined by market forces—not individual companies.”
“Claims that the price at the pump is anything but a function of supply and demand are false,” it continued.
According to AAA, gas prices trekked higher by a nickel over the past week, as the national average pump price settled at $3.72—fourteen cents less than a month ago but fifty-four cents more than a year ago.
“The main reason is higher regional prices on the West Coast and the Midwest due to refinery issues ranging from planned maintenance to a fire,” the site wrote. “But low domestic demand as fewer drivers fuel up and much lower oil prices have helped to blunt some of the impact.”
Still, Andrew Gross, AAA spokesperson, is keeping a close eye on Ian.
“Hurricane Ian could cause problems, depending on the storm’s track, by disrupting oil production in the Gulf of Mexico and impacting large coastal refineries,” he said.
According to data compiled by the Energy Information Administration (EIA), gas demand declined from 8.49 million b/d to 8.32 million b/d last week. Additionally, total domestic gasoline stocks increased by 1.6 million bbl to 214.6 million bbl.
“Although gasoline demand has decreased, tight supply and fluctuating oil prices have increased the national average price,” AAA wrote. “However, if gas demand remains low, pump price increases will likely be minimal.”
Ethen Kim Lieser is a Washington state-based Finance and Tech Editor who has held posts at Google, The Korea Herald, Lincoln Journal Star, AsianWeek, and Arirang TV. Follow or contact him on LinkedIn.