American Petroleum Institute denies price gouging during Hurricane Ian

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American Petroleum Institute denies price gouging during Hurricane Ian

The American Petroleum Institute API, the top fossil fuel industry group in the U.S., responded to President Biden on Wednesday, saying allegations that oil companies would price gouge during the hurricane in Florida were false. The API stated that gasoline prices are determined by the market and its member companies are focused on securing supplies amid the massive storm that is sweeping through Florida. More than a million residents were forced to lose power as a Category 4 storm due to Hurricane Ian's landfall Wednesday afternoon, prompting safety warnings from Florida officials.

An API spokeswoman for Fox News Digital said that the industry is focused on keeping the energy market well-supplied and delivering fuel where needed most while ensuring the safety of our workforce.

The spokesperson said that gasoline prices are determined by market forces, not individual companies, and that the price at the pump is anything but a function of supply and demand.

Earlier in the day, Biden warned oil companies not to hike gasoline prices during the expected demand surge during the hurricane. He stated that his administration was prepared to investigate any increase in prices at the pump that would affect those in the storm's path.

Do not use this excuse as an excuse to raise gasoline prices or gouge the American people, Biden said. The production of only about 190,000 barrels a day has been impacted by the storm, according to my experts. It's less than two percent of the United States' daily production impacted for a very short period of time. This small, temporary storm impact on oil production provides no excuse for price increases at the pump. If companies try to raise prices at the pump with this storm, I will ask officials to look into whether price gouging is going on. Biden made comments about high gasoline prices over the last several months, which he and other administration officials have made repeatedly. Biden and several Democratic lawmakers blamed oil companies for taking advantage of the crisis, as prices surged to record highs in May and June.

American Fuel and Petrochemical Manufacturers AFPM, a leading group representing U.S. petroleum-refining companies, pushed back Wednesday against Biden's comments, echoing API.

The group said that our country has seen that major storms and often-correlated runs on gas stations can have a big impact on prices. Nearly 20 percent of retail stations in Florida are out of gas or out of power. There is less supply overall and some temporary inability to access supplies in certain Florida communities where there is, at present, heightened local demand, according to AFPM. The market will work to fix this imbalance quickly, but a return to normalcy will likely not be immediate as the supply chain is complex and buyers will need to return to normal purchasing habits. The state has a system for investigating alleged violations of the law, which is illegal under Florida statute and that price gouging is illegal.

In the last year, Biden ordered the Federal Trade Commission FTC to investigate whether oil companies were price gouging amid a surge in gasoline prices. The agency has yet to conclude the investigation.

Past reports by the FTC and Federal Reserve have shown that past increases in gas prices aren't a result of price gouging.