The Democrats have been trying to blame anyone and everyone else but Biden for inflation for many months now. In the course of a year, we’ve gone from “inflation will be transitory,” to “inflation is a good thing,” to “inflation started under Trump,” to “it’s Putin’s price hike.” Polls show that no one was buying the blame-Putin strategy, so Biden and the Democrats are now accusing oil companies of price gouging.
“Oil and gas companies shouldn’t pad their profits at the expense of hardworking Americans,” Biden said in a tweet in March.
“While families are struggling to pay higher prices at the pump, oil and gas companies are recording record profits,” House Speaker Pelosi claimed earlier this month.
While this may be a more effective strategy than blaming Putin, since Big Oil has been a favorite bogeyman of the left for decades, this talking point has been debunked in epic fashion by the Federal Reserve Bank of Dallas.
Senior Dallas Fed economists Garrett Golding and Lutz Kilian explained in a blog post this week that there are many factors that have contributed to record-high gas prices across the country, and price-gouging isn’t one of them. They point out that oil drillers do not typically set gasoline prices and are actually impacted by other factors, like rent and credit card fees.
On top of that, Big Oil companies account for only 17% of U.S. crude oil production, while independent oil and gas companies account for 83%.
“Gas station operators set retail prices based on their expected acquisition cost for the next delivery of fuel from the local distributor, federal and state tax rates, and a markup that covers operating expenses, such as rent, delivery charges and credit card fees,” they wrote. “Since only 1 percent of service stations in the U.S. are owned by companies that also produce oil, U.S. oil producers are in no position to control retail gasoline prices.”
“The elevated retail gasoline prices must be attributed to events in the U.S. retail gasoline market beyond the control of oil producers,” they explain. “Moreover, the asymmetry of the response of retail gasoline prices need not be evidence of price gouging.”
Sorry, Dems… another talking point bites the dust.