Government policy cannot meaningfully relieve the price increases in the short term, besides an additional release of oil from the strategic reserve or a gas tax holiday, each of which would likely reduce just a fraction of the cost, experts told ABC News.
But steps taken now could help foster decreases over the long term and insulate the market from future disruptions, they added.
The release of oil from the U.S. SPR is offering slight relief for the rise in the price of gasoline, some experts told ABC News."The price of oil would be even higher without those stockpiles being used," said Pavel Molchanov, a senior energy analyst at Raymond James. Glickman, the energy analyst at CFRA, said the move from Biden is unlikely to increase supply and lower gas prices, since the domestic industry is already operating at as high as 96% capacity. The refineries cannot add capacity in a short period of time, Glickman added.
One approach to incentivizing an increase in U.S. production includes a potential tax on oil company profits. But such a move wouldn't remove the impediments to greater oil production capacity, Glickman said. U.S. oil production increased throughout the years of the Trump administration until a sharp, pandemic-induced drop that began in 2020, according to EIA data.
Overall, increased U.S. oil production would help reduce gas prices over the next five or 10 years, and protect the industry from future supply shocks, the experts said. However, some experts noted that the sector's reluctance to aggressively expand production owes to fiscal discipline imposed by shareholders as well as the continued rise of renewable energy."We know the energy transition is coming at some point," said Glickman, the CFRA analyst.
Australia Latest News, Australia Headlines
Similar News:You can also read news stories similar to this one that we have collected from other news sources.
Sen. Chuck Grassley: Biden turned America from independent to 'energy-dependent’Republican Iowa Senator Chuck Grassley discusses potential solutions to high gas prices in wake of record inflation rates on 'Cavuto: Coast to Coast.'
Read more »
Why lowering gas prices isn't that simpleGovernment policy cannot significantly reduce gas prices in the short term, experts told ABC News.
Read more »
The best cure for high gas prices could be -- high gas pricesThere’s not a lot that Joe Biden, Congress or the Federal Reserve can do to bring down the record high gas prices. High gas prices themselves might do the job for them.
Read more »
Texas lawn service industry feeling weight of gas pricesA lawn service business is trying to survive gas prices.
Read more »
'We don’t go by money’: Gas station owner lowers prices to help customersA gas station owner in Phoenix is selling gas at nearly a half dollar less a gallon than other stations in the city as prices across the country hit record highs.
Read more »
Police: Thieves Drilling into Gas Tanks to Steal Fuel as Prices ClimbThe Fontana Police Department in California said because of skyrocketing gas prices, thieves were drilling into gas tanks to swipe fuel.
Read more »