Average gasoline prices in the US hit $5 a gallon for the first time on Saturday, adding pressure to decades of high inflation that has become politically costly for the Biden administration.
The new $5 mark means gas prices in the US have increased by more than two-thirds in the past year and more than doubled since Joe Biden took office, according to a AAA motor club report.
Rising energy prices have fueled a significant portion of continued inflation surgeaccelerated again in May and is now running at its fastest annual rate since December 1981. The latest Consumer Price Index, released on Friday, shows prices have risen just 1% last month, or 8.6% from the same time last year. five.
The administration has repeatedly sought to blame Russian President Vladimir Putin, citing the country’s invasion of Ukraine as the main cause of the sharp rise in crude oil prices, which in turn drives up fuel costs.
The international price of Brent oil has risen to more than $120 a barrel since Moscow sent troops into Ukraine – up from a low of nearly $10 a barrel during the pandemic two years ago.
In recent months, the White House has announced the release of record volumes of oil from the federal emergency stockpile to ease supply shortages, while calling on Saudi Arabia and the Opec countries to + other significantly increased supply.
The White House has also blamed American oil companies for their reluctance to drill.
Speaking in Los Angeles on Friday, the president took aim at ExxonMobil, America’s largest oil company, saying it had “made more money than God this year.”
U.S. oil company executives say Wall Street’s demand that they spend on high oil prices for dividends, not new production, has held back spending on new supply .
Biden and other top officials, including Treasury Secretary Janet Yellen, have repeatedly said that tackling high inflation is the administration’s “number one priority,” a message they delivered in their ratings. Presidential approvals have fallen to a record low.
Republican lawmakers seized the opportunity to Grilled Yellen this week in congressional testimony, forcing her to defense the Biden administration fights charges that it has pressured prices through its spending.
Biden has also encouraged the Federal Reserve to do what it takes to combat high inflation, stressing its independence in conducting rapid rate hikes. Since March, the US central bank has raised its benchmark policy rate by 0.75 percentage points and next week is expected to make another half point rate hike, after delivering the released its first level since 2000 in May.
A string of such increases is expected in the second half of 2022 as the Fed aims to “urgently” shift its monetary policy to a “neutral” setting that no longer stimulates demand.
At $5 a gallon, the price of US gasoline – the equivalent of £1.07 or €1.26 per liter – is still far below retail prices across the Atlantic. According to the RAC, petrol in the UK in recent days has sold on average for £1.83 a litre.
