WASHINGTON (FT) – Rising fuel in the U.S. prices are triggering alarm in Washington just as President Joe Biden steps up his bid for re-election by touting lower inflation and the strength of the economy.
The surge in petrol costs to a nine-month high follows a 20 percent jump in global crude prices this summer, after Saudi Arabia and Russia slashed supply. The move has revived predictions of $100 a barrel oil this year — and new worries about the political fallout.
“The White House is in full-blown panic mode,” said Bob McNally, head of Washington-based consultancy Rapidan Energy Group and a former adviser to president George W Bush.
“Any sitting president is threatened when pump prices go up because of the impact on consumer confidence and the president’s approval rating,” he added.
A White House official said the administration was continuing to closely monitor petrol prices, but added that it was “important to remember that prices are still down over $1 since their peak last summer”.
Saudi Arabia last week risked angering the White House by announcing that it would extend and potentially deepen existing oil production cuts, despite the International Energy Agency warning that crude markets are set to tighten significantly in the coming months. The kingdom followed up on Saturday by increasing the price of its oil it in Asia.
The Biden administration has repeatedly called on Riyadh to pump more oil in the past two years, and last year accused the OPEC+ of “aligning with Russia” when it launched its current phase of supply cuts.
The latest U.S. pump price increases include diesel, a crucial input cost for industrial and agriculture sectors, and come as hopes rise that the Federal Reserve can engineer a soft landing for the economy after months of interest rate rises to quell inflation.
The president has spent recent weeks touting his “Bidenomics”, citing a cooling of inflation and record job creation.
But Republican opponents have latched on to the recent fuel price increases, blaming them on what Florida Governor Ron DeSantis calls Biden’s “war on American energy” — a signal of future GOP attack lines if petrol costs keep rising.