In a letter to business leaders, Biden says “historically high refinery profit margins” are hurting U.S. consumers.

US President Joe Biden has called on oil refiners to produce more gasoline and diesel, saying their high profit margins are hurting consumers.

Biden made the call in a letter Wednesday to major refiners, including Exxon Mobil, Chevron, Shell and British Petroleum. While he said the Russian invasion of Ukraine is “primarily responsible” for the financial burden American residents face, “historically high refinery profit margins compound that pain.”

“The crisis facing families deserves immediate action,” Biden wrote in the letter, which was obtained by the Associated Press news agency and US media. “Your companies must work with my administration to come up with concrete short-term solutions that respond to the crisis.”

Gasoline prices in the United States are currently averaging about $5 per gallon ($1.32 per liter), the highest price on record, an economic burden for many Americans and a political threat to the president’s Democratic colleagues ahead of the midterm elections.

Broader inflation began to rise last year as the US economy recovered from the coronavirus pandemic, but has accelerated in recent months as energy and food prices have climbed after the start of the Russian invasion on February 24 and disrupted global commodity markets. The government announced on Friday that consumer prices jumped 8.6% from a year ago, the biggest increase in more than 40 years.

In the letter, Biden called the issue a “global challenge and of global concern,” but described an “unprecedented disconnect” between refining costs and the price consumers pay at the pump.

“Year-to-date, refining margins for gasoline and diesel refining have tripled and are currently at their highest levels on record,” he said.

Economists have questioned how much corporate greed contributes to high prices, which can be attributed to constraints on expanding capacity to meet current needs following cuts during the pandemic. This imbalance has been further aggravated by major consumers, notably the European Union, turning away from Russian fossil fuels and increasing demand elsewhere. It’s still unclear what capacity can realistically be added in the short term.

In the letter, Biden said the administration is prepared to “use all reasonable and appropriate tools of the federal government and emergency authorities to increase refinery capacity and production in the short term, and to ensure that each region of this country is adequately supplied”.

He noted that the administration has already released oil from the U.S. strategic reserve and increased ethanol blending standards, though neither action puts lasting downward pressure on prices.

He also asked Energy Secretary Jennifer Granholm to call an emergency meeting and consult with the National Petroleum Council, a federal advisory group from the energy sector.

Biden asked refiners to explain to Granholm any drop in refining capacity since 2020, when the pandemic began. He also wants companies to provide “any concrete ideas that would address immediate inventory, price and refining capacity issues in the coming months – including transportation measures to get the refined product to market. “.