Gas Prices Hit Another Record High Today, What's Biden Doing?

Gas Prices Hit Another Record High Today, What’s Biden Doing?

“We did it Joe!”

Record high gas prices for the 11th straight day…’s Mike Shedlock checks in on gas prices… and the Biden administration’s plans to deal with them…

AAA reports Increased Gas Demand Pushed Pump Prices Higher

Since Monday, the national average for a gallon of regular gasoline has increased by 10 cents to $4.58. According to new data from the Energy Information Administration (EIA), total domestic gasoline stocks decreased by 4.8 million bbl to 220.2 million bbl last week. On the other hand, gasoline demand increased from 8.7 million b/d to 9 million b/d. Tighter supply and increased demand have pushed pump prices higher. This supply/demand dynamic, combined with volatile crude prices, will likely continue to keep upward pressure on pump prices.

Gas price info courtesy of AAA

What’s Biden Doing?

The truth accidentally comes out: “We have no plan to bring down energy prices today” [corrected to they, from we]

Q: What are Democrats doing?

A: Nothing that makes any sense 

The Consumer Fuel Price Gouging Prevention Act was sponsored by Rep. Kim Schrier (D-Wash.) and Katie Porter (D-Calif.).

Under the bill, “Companies would be barred from charging “unconscionably excessive” prices for gasoline or other fuels during the emergency. 

The Federal Trade Commission could investigate allegations of price gouging at the federal level, while state attorneys general could take action at the retail level.

Idiocy is Striking

As noted previously, the big oil refiners own less than 5% of the 145,000 retail stations.

Where Your Money Goes On a Gallon of Gas

Please consider Why Most Gas Stations Don’t Make Money From Selling Gas

Gas stations typically only receive a fraction of the price listed on the sign. And after factoring in overhead — labor, utilities, insurance, credit card transaction fees — the average profit is winnowed down to ~$0.03 to $0.07 per gallon.

Now, there is a lot of variance here: Some owners The Hustle spoke to claim to make $0.30+/gallon; others, as little as $0.01.

But assuming daily sales of 4k gallons at $0.05/gallon, your typical station might only bring home $200-300/day from gas.

By contrast, those coin-operated air machines you find at most stations can rake in $300 to $500 in profit per month — even after paying the companies that lease them out.

Most of the stations with big markups are in out of the way places where you are thankful to have gas at all. 

Death Valley comes to mind. 

The Real Money is Made Inside the Store

Today, 80% of all gas stations have a convenience store on site.

According to a study conducted by the National Association of Convenience Stores, 44% of gas station customers go inside. And among them, 1 in 3 ends up indulging in some kind of treat.

The goods inside these stores — Doritos, sunglasses, lotto tickets, energy drinks — only account for ~30% of the average gas station’s revenue, yet bring in 70% of the profit.

Strategic Reserve Release

Hey, what about Biden’s Strategic Oil Reserve release?

OK: Let’s check in on that. 

Please note this White House Briefing

President Biden Announces Release from the Strategic Petroleum Reserve As Part of Ongoing Efforts to Lower Prices and Address Lack of Supply Around the World.

When was that? 

Excuse me for pointing out, November 23, 2021. 

Also forgive me for asking “Did it work?”

Nonetheless, Biden doubled down. 

April 21, 2022 Fact Sheet

Please consider the April 21, 2022 Fact Sheet

Biden Administration Responds to Putin’s Price Hike by Awarding First Barrels from Historic Strategic Petroleum Reserve Release & Deploying Affordable Clean Energy

With these announcement, President Biden is demonstrating both his unwavering commitment to doing everything in his power to ease the pain American families are facing today at the pump as a result of Putin’s Price Hike, while continuing to take strong action – right now and without delay – to achieve lasting American energy independence.

Largest-Ever Release of Oil from the Strategic Petroleum Reserve. President Biden announced the largest-ever release of oil from the Strategic Petroleum Reserves, which will put one million additional barrels on the market per day on average—every day—for the next six months. The release will provide a record amount of supply to the market until the end of the year, when domestic production is expected to increase by 1 million barrels per day. 

Political Strategy vs Strategic Release

For starters, until this announcement, the November release was the biggest ever. How did that work out?

Second, there is nothing all all strategic about either of these releases. 

This is nothing more than a political strategy by the President. The ridiculous effort in Congress today is more of the same.

At most there will be a temporary drop in price of 15 cents a gallon. But eventually the reserves will have to be filled back up in case there is a genuine strategic need. 

And at what price will that happen? 

Meanwhile, Biden is begging Venezuela and Saudi Arabia to pump more even though we have sanctions on Venezuela.

Biden’s Plan in Action

US and EU sanctions have driven up the price of oil and natural gas so much that Russia is actually benefitting from the sanctions!

That my dear readers is Biden’s plan in action. The Republican plan is to pump more US oil. 

Even if the latter cannot happen immediately, no plan at all is better than mess the Democrats have concocted.

In case you missed it, please see MishTalk TV With the Head Energy Trader at Price Futures Group

Flynn notes the targeted release cannot happen because the pipes do not have the physical capacity. 

Rather than blame themselves, Democrats blame gas gougers. What a hoot.

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Tyler Durden
Fri, 05/20/2022 – 13:01

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