As we all know, gas is extremely expensive right now. President Biden realizes what this is doing to American consumers and has finally put his foot forward to help.
Biden authorized the release of 50 million barrels of oil from the Strategic Petroleum Reserve. Biden also said that he released the reserve at the same time as leaders in Japan, South Korea, India and the United Kingdom, which would also release their own reserves.
This effort will have no effect on gas prices overnight, but eventually will affect the rising prices.
Biden later said that the release from the reserve was intended to relieve high prices in the short term. However, a strategy to transition to other fuel sources would be more effective in the long term.
U.S. Energy Secretary Jennifer Granholm said the White House hopes to see gas prices drop down to pre-pandemic levels.
Article : https://www.houmatoday.com/story/business/2021/11/27/president-joe-biden-opens-strategic-petroleum-reserve-oil-gas-prices/8764402002/
4 comments:
You mentioned how transitioning to other fuel sources would be more effective in the long term. This is difficult to advertise to people because as we have mentioned in class, shareholders and investors want to see profit all the time. Unless the government were to heavily subsidize these projects and firms that produce the other fuel sources, we will likely never transition. Additionally, if the government were to heavily subsidize those projects, it would likely result in heavy tax increases and regardless of the reason, American citizens often do not like tax increases.
It will be interesting to see how this form of economic intervention by the U.S. government will affect oil prices as comes at a time where a new COVID-19 variant has been identified. When the news broke about the omicron variant, the price of oil dropped by almost 10% as fears began to spread about more widespread lockdowns and less demand for oil. President Biden may need to reevaluate this decision after some time as this may lower prices too drastically.
It will be interesting how gas prices are affected from the Omicron variant. This variant will likely introduce new travel restrictions and polices and decrease the demand for Oil.
With the current economic situation in the US, I admire the president's job in order to lower the prices for good. Gas is an essential part of many employees in the United States. This attempt will help millions of workers to manage their spending and use their saved spending fro other goods.
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