Another Twitter feud between Jeff Bezos and the White House erupted over the weekend, which centered around how to handle soaring inflation. The Amazon founder already criticized the Biden administration for the rising price pressures back in May, saying the failed “Build Back Better” bill and proposed $3.5T to federal spending would have only exacerbated the current inflationary environment. Bezos has also taken issue with claims that “wealthy companies do not pay enough in tax,” and is likely upset at Biden’s support for organized labor given the recent unionization efforts at Amazon that have been building since he took office.
The latest: “My message to the companies running gas stations and setting prices at the pump is simple: this is a time of war and global peril. Bring down the price you are charging at the pump to reflect the cost you’re paying for the product,” President Biden tweeted on Saturday, before Bezos took to Twitter with a response. “Ouch. Inflation is far too important a problem for the White House to keep making statements like this. It’s either straight ahead misdirection or a deep misunderstanding of basic market dynamics.”
“Oil prices have dropped by about $15 over the past month, but prices at the pump have barely come down. That’s not “basic market dynamics.” It’s a market that is failing the American consumer,” White House Press Secretary Karine Jean-Pierre wrote, wading into the tussle. “But I guess it’s not surprising that you think oil and gas companies using market power to reap record profits at the expense of the American people is the way our economy is supposed to work.” According to AAA, the national average price for a gallon of regular gas was $4.81 on Monday, around $1.70 higher than a year ago, but down 4% from the record high of $5.02/gallon seen on June 14. Crude could soar to $380/bbl in worst-case Russian output cut – J.P. Morgan.
Go deeper: Pump prices can vary tremendously by location, and currently span several dollars even based on the state due to taxes and fees. Some point out that gas station operators have very small profit margins on their gas (making the bulk of their money from in-store purchases), though refiners and oil-and-gas companies can have influence on those final prices. Looking to alleviate pain for U.S. drivers and the economy, the Biden administration has already tapped the U.S. Strategic Petroleum Reserve and is seeking to enact a federal gas tax holiday. It has also lobbied the G7 to impose a cap on Russian oil exports, tried to increase the global production of OPEC producers and just proposed a drilling plan that could allow limited leasing off Alaska and in the Gulf of Mexico.
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