WASHINGTON (AFP) – US President Joe Biden reached for the country’s strategic oil reserves Tuesday (Nov 23) in a bid to reassure Americans angry about inflation and goods shortages as they head off to Thanksgiving – and to buoy up his sinking poll ratings.
Facing growing discontent around the country over inflation and especially the soaring price of fuel in filling stations, Biden announced a coordinated plan with other big consumers to release national oil reserves onto the market.
The White House said that following weeks of negotiations, “this release will be taken in parallel with other major energy consuming nations including China, India, Japan, Republic of Korea and the United Kingdom.”
“It will take time but before long you should see the price of gas drop,” Biden said in a speech at the White House. While the US economy is rebounding strongly from the Covid-19 lockdowns, supply chain disruption and inflation is stirring anxiety as the holiday season begins with Thanksgiving on Thursday.
“Moms and dads are worried asking will there be enough food we can afford to buy for the holidays? Will we be able to get Christmas presents to the kids on time?” Biden said, acknowledging that for many the price rises are “painful.” However, he pushed back at critics who accused him of failing to grasp the challenge.
Biden noted that the two biggest trading ports, both in southern California, were now working 24/7, as opposed to just 40 hours a week.
In the latest average of polls from fivethirtyeight.com, Biden’s approval rating is just 42.8, with 52.2 per cent disapproving.
Republican opponents were not impressed with Biden’s reassurances.
“Joe Biden’s failed leadership caused skyrocketing prices, and now American families are paying more for gas, groceries, and everything this Thanksgiving,” Republican National Committee chair Ronna McDaniel said in a statement.
Expensive holiday trips
US employment is rapidly rising, wages are up and the stock market is climbing ever higher, but inflation, especially for fuel, is spoiling the mood. Average fuel prices at filling stations are US$3.41 (S$4.66) a gallon, the highest level since 2014, according to latest figures from the AAA motorists’ association.
This represents an increase of US$1.29 over gasoline prices a year ago. Like millions of Americans, Biden and his wife Jill are travelling to family or friends ahead of Thanksgiving, although in his case it was to be on Air Force One later Tuesday for a short flight to the picturesque island of Nantucket.
High transport costs are also juicing costs and scarcity throughout the economy, with supply issues impacting everything from second hand cars to clothing.
Biden said the rough patch was temporary and that visions of empty shelves at Christmas would not come to pass. “Families can rest easy. Grocery stores are well stocked with turkey and everything, you know, (that) you need for Thanksgiving,” Biden said. “And the major retailers I mentioned can confirm that their shelves will be well stocked in stores this holiday season,” he said.
Energy companies under scrutiny
The US strategic reserves, held in underground depots in Texas and Louisiana, are the largest emergency supply of oil in the world. A senior administration official said the releases would start in mid- to late December, and that further intervention was possible to steady the market, “responding to a once-in-a-century pandemic.”
“As the president has said, consumers are facing pain at the pump right now,” the official said. “The president stands ready to take additional action if needed and is prepared to use his full authorities, working in coordination with the rest of the world, to maintain adequate supply as we exit the pandemic.”
Against a backdrop of rising output, oil prices have already dipped nearly 10 per cent in the last few weeks. But officials echoed Biden’s repeatedly stated concerns that despite easing crude values, prices of gasoline for drivers have only gone up.
“There is mounting evidence that declines in oil prices and the cost of other inputs into gasoline are not translating into lower prices at the pump,” said the senior official, who spoke on condition of anonymity.
The official said the government was looking into “anti-competitive practices” and will “examine whether illegal conduct is costing families at the pump.”