President Biden and White House officials unveiled a new messaging strategy Wednesday asserting that fossil-fuel companies are working to “pad their pockets” because prices at the pump have failed to lower as rapidly as oil market prices.
“Oil prices are decreasing, gas prices should too,” Mr. Biden tweeted as part of a new coordinated effort by the White House to bring attention to oil industry practices. “Last time oil was $96 a barrel, gas was $3.62 a gallon. Now it’s $4.31. Oil and gas companies shouldn’t pad their profits at the expense of hardworking Americans.”
White House Chief of Staff Ronald Klain quickly followed suit, ridiculing the so-called “rockets up, feathers down” phenomenon in a tweet of his own.
“’Rockets up, feathers down’ is not a law of nature or physics when it comes to gas prices,” Mr. Klain said. “Putin’s aggression may drive up the price of oil again in the future. But when that price is down — as it is now — gas prices should reflect that.”
Although the tactic may be politically convenient and is an example of the pressure that the administration is under to lower costs for consumers, the president’s claim is not supported by historical trends or industry experts.
Whenever the cost of oil rises, gasoline prices quickly follow. But when oil goes down, the tendency for gasoline prices to remain inflated and take far longer to decrease is not a new phenomenon. It even has a nickname, rockets and feathers, as Mr. Klain indicated. When oil goes up, the price of gasoline shoots up like a rocket. But when oil goes down, gasoline falls like feathers.
“There’s a lag time,” Patrick De Haan, an energy analyst who founded the popular GasBuddy app, said in a tweet. “Stations were solidly in the red on the way up, and now in the green. They will slowly pass on the dips while making up for the losses earlier in the rally.”
He predicted that the national average — which was $4.31 as of Wednesday, according to AAA — has room to fall 35-55 cents per gallon over the next 3-5 weeks.
“The question is,” Mr. De Haan said, “will oil prices stay at these lows and allow it, or do we get a new rally that stops the relief I’m referring to?”
Oil prices rose last week to their highest closing levels since 2008. WTI crude, the U.S. benchmark, rose to nearly $124 per barrel and Brent crude, the global standard, was up to nearly $128.
Gasoline prices followed suit, shooting up to a national average of $4.25 for a gallon of regular unleaded fuel.
But as of Wednesday, oil prices were back down to under $100 per barrel, a more than 20% decline. Still, gasoline prices remained inflated with a national average of $4.31 for regular, down just two cents in as many days from their record high of $4.33.
The Biden administration and Democrats have long blamed recent price hikes on “price gouging.” But industry analysts and experts have said the real reason is far more nuanced and involves several factors, including a lack of global supply and weary energy producers in the wake of deflated pandemic-era prices.
The majority of gas stations are owned by single-station owners separate from major corporations, despite the big-name brand that may be on display. That means individual stations often have little wiggle room when setting prices.
But sooner or later, prices at the pump will be legally forced to sync up with the oil markets, energy markets expert Dan Dicker said.
“Whether this stuff, in the end, is slightly manipulated by marketers or gas station transports to hang on to those higher gas prices, I won’t say no,” Mr. Dicker said. “But sooner or later, within days or weeks, the prices at the pumps legally have to represent what the markets are bearing.”