Page 8 - NorthAmOil Week 25 2022
P. 8
NorthAmOil POLICY NorthAmOil
Biden calls for three-month suspension
of federal gasoline, diesel taxes
US US President Joe Biden this week called for Con- ($0.264 per litre) by pausing the gasoline tax at
gress to suspend federal gasoline and diesel taxes the federal and state levels combined with energy
for three months amid soaring average gasoline companies piling their profits into additional
prices that have reached close to $5 per gallon production and refining capacity.
($1.32 per litre) on a nationwide basis. However, some economists think that even
In a public critique of the oil and gas indus- if a tax holiday were to gain enough support in
try, Biden also asked states to pause their own Congress, the move would have little impact for
gasoline taxes as high prices put a strain on com- consumers at the pump, since there is no guar-
muters and travellers during the busy holiday antee that the tax savings would be passed on.
period. He said states were in a strong position to Economists have also warned that the move
take action, citing federal support from the 2021 could actually backfire on the economy and
coronavirus (COVID-19) relief bill. encourage more spending at a time when the
The federal tax on gasoline is $0.184 per gal- government is trying to reduce inflation.
lon ($0.049 per litre), while the federal tax on Actions taken to punish Russia for its inva-
diesel fuel is $0.244 per gallon ($0.064 per litre). sion of Ukraine have been cited by Biden as a key
The cost of a gasoline tax holiday is estimated by driver of higher prices, and he has demanded that
Biden administration officials to be $10bn. energy companies do more to help by refining and
It is thought that suspending gasoline taxes selling more gasoline. (See NorthAmOil Week 24)
could prove difficult for Biden, as many lawmak- Biden’s attempts to rein in gasoline prices have
ers, including several Democrats, have expressed had a limited impact at the pump to date. Releas-
objections over the tax holiday. ing oil from the US Strategic Petroleum Reserve
The Biden administration believes that gas- (SPR) as well as increasing ethanol blending have
oline prices could be lowered by $1 per gallon both largely failed to curb rising prices.
US, Canada and allies discuss
price cap on Russian oil
GLOBAL THE US has held talks with Canada and other Yellen said the US would continue working
allies to consider imposing a price cap on Russian actively with its partners on the Russian oil price-
oil in the latest attempt to limit Moscow’s energy cap plan and said to “stay tuned” when she was
revenue amid the ongoing war in Ukraine. asked if the plan would be ready for the Group
Speaking at a press conference in Toronto on of Seven (G7) meeting in Germany later this
June 20, US Secretary of the Treasury Janet Yel- month.
len stated that a price exception could serve as European officials have warned, how-
an effective cap. This could be achieved through ever, that the plan could be too complicated
a mechanism to restrict or ban insurance of and would require the EU to rework its latest
financing for Russian oil shipments above a cer- sanctions. The legal text for the most recent
tain amount. sanctions package took weeks to approve, with
“We are talking about price caps or a price numerous obstacles needed to be overcome in
exception that would enhance and strengthen order to achieve unanimity among the EU’s 27
recent and proposed energy restrictions by members.
Europe, the United States, the UK and others, The US, Canada, the UK and a handful of
that would push down the price of Russian oil other countries have banned Russian oil from
and depress Putin’s revenues, while allowing being imported, but the EU remains highly
more oil supply to reach the global market,” Yel- dependent on Russian crude for now, even as
len told reporters. it works to address this. The bloc has, however,
“We think a price exception is also an agreed to ban seaborne imports of Russian crude
important way to prevent spillover effects to in six months. It has also agreed to collaborate
low-income and developing countries that are with some G7 members, such as the UK, to ban
struggling with high costs food and energy,” she the insurance services needed to ship Russian oil
added. anywhere in the world.
P8 www. NEWSBASE .com Week 25 23•June•2022
