While the price on gas has dropped over the past few weeks and can even be bought for just under $4 a gallon, the consumer is still not happy.
Small business owners are paying more for everything with much of the increased cost, one way or another, due to higher gas and diesel prices. And, of course, the small businesses have to pass their higher gas-induced costs on to you, the consumer.
The blame for these gas prices is being largely placed on President Joe Biden and congressional Democrats. They are running everything in Washington, aren’t they? Well, they are not, but that is another issue.
Consider this: Neither the president nor any member of Congress, Democrat or Republican, has voted to raise gas prices. Yes, there has been bipartisan support of Ukraine in its battle against the Russian invasion, support that has included agreement to stop buying Russian oil. Most consumers understand that some of the increased cost of gas stems from this publicly backed foreign policy.
Refinery capacity is down, which also adds to the problem especially when the summer vacations are causing an increased demand for gas.
So, what happens if tomorrow we flipped the presidency and control of the U.S. House and Senate. What would change regarding gas prices?
Congress could pass a federal gas tax holiday until the end of the year that would cut about 18 cents off a gallon of gas. President Biden has proposed a 3-month suspension of the gas tax but there is bi-partisan opposition in Congress in spite of how popular the proposal is with Americans. A different president could release more oil from the nation’s strategic reserve, but Biden has already done much of that.
What is dumbfounding then is why does the American public want to blame Washington? Yet, there is no public outrage for the folks who are responsible for raising the price of a gallon of gas — the oil industry.
Oil industry profits were up nearly 300% in the first quarter of this year compared to the same period last year! (As of this writing, second quarter data is not available.) We are talking about profit after taking into consideration their expenses and write downs due to exiting their business in Russia.
Have the oil companies used any of this obscene profit to keep the gas prices as low as possible while still making a decent profit? Of course not!
Instead, the oil companies are doing what all giant corporations do when they receive a windfall (as they did in 2018 after getting a 40% tax rate cut from Congress). They use the money primarily for buying back their own stocks, increasing their value to the benefits of their shareholders and executives.
Where is the public outrage?
If there is finger-pointing to be done on high gas prices, it should be directed to the businesses that are greedily jacking up their prices to make higher profits. Not the gas station owner. The oil companies.
If the president and members of both political parties are to blame, it is because they are not calling out Big Oil enough. President Biden has started doing just that and Big Oil responded by bringing down the price of gas just a little. Congress can do more by passing legislation for a windfall profits tax on Big Oil with the revenue given back to consumers.
The disconnect between a major cause of high gas prices and who is being blamed is clear. And the oil companies are laughing all the way to the bank.
Frank Knapp of Columbia is president and CEO of the S.C. Small Business Chamber of Commerce.