Washington Gas Prices Jump to Another Record as Biden Puts Spotlight on Soaring Refiner Profits


Washington's statewide average price for a regular gallon of gas edged up on Wednesday to nearly $5.56, an 11% jump from a month ago.

This cost is currently the fourth highest in the nation, according to AAA surveys of retail stations. Washington's average cost of a gallon of diesel, at more than $6.24, also ranks fourth highest.

The surging gas prices are at record levels, although when adjusted for inflation, the national average was at a higher level in 2008. And in Washington they have fueled an intensifying political debate about what action can, or should, be taken to try to bring them down amid an international energy crunch triggered by Russia's invasion of Ukraine.

On Wednesday, President Joe Biden sent a letter to seven oil company executives that noted gas prices have risen in recent months at a much more rapid pace than oil prices, and refiners' profit margins for refining gasoline and diesel have tripled.

Biden wrote that "at a time of war, refinery profit margins well above normal being passed directly onto American families are not acceptable." He said U.S. Energy Secretary Jennifer Granholm would soon convene an emergency meeting on gas prices, and asked for information about any reductions in refining capacity.

The American Petroleum Institute, in a statement, criticized the Biden administration's "misguided policy agenda" to shift away from domestic oil and gas that has "compounded inflationary pressures and added headwinds to companies' daily efforts to meet growing energy needs while reducing emissions."

In a letter to Biden, API president Mike Sommers called for a 10-step plan that includes lifting some oil development restrictions on federal lands and waterways and revisions that would speed up a federal environmental-permitting process.

Oil prices make up the biggest portion of the price of a gallon of gasoline.

Oil market prices reached a brief peak on March 8 of $133.18 for a barrel of Brent crude. At that time, the average U.S. price for a gallon of regular was $4.07.

This week, the price of a barrel of Brent crude had trended under $130 a barrel. But on Wednesday, the national average for a gallon of regular was $5.01, up 94 cents from March 8, according to the AAA.

In his letter, Biden cited what he called an "unprecedented disconnect" this year between oil and gas price trends.

In analyzing the rise in U.S. gas prices, the Energy Information Administration has noted a 5% reduction in refining capacity since 2020 as some facilities have closed.

Investment in new oil refining capacity has faltered amid a global effort to shift away from fossil fuels to other sources of energy that can reduce the greenhouse-gas emissions driving climate change.

The EIA notes that the reduction in U.S. refinery capacity, along with increased demand, has helped push up the prices for gasoline, diesel, jet fuel and other refined products through most of the spring. Refinery profit margins are at, or near, record levels, according to the EIA.

In the months ahead, refinery production is expected to increase to near capacity, and prices for gasoline and diesel are forecast to decline but remain well above prices in recent years, according to a June 10 EIA report.

In Washington, the higher fuel prices reflect in part state gas taxes that rank among the highest in the nation. But from 2017-2021, even when accounting for tax increases, the spread between the average price of gas in Washington and the average price nationwide increased when compared to the 2011-2016 time period.

Most of the fuel consumed by motorists in Western Washington comes from five refineries around Puget Sound. East of the Cascades, Intermountain West refineries provide fuel delivered through pipeline networks.

As of Wednesday, Skamania County had the highest average gas price in the state, at nearly $5.90 a gallon, followed by Wahkiakum County at nearly $5.75 per gallon and King County at more than $5.72.

Southeast Washington's Asotin County, which borders Idaho, had the cheapest average gas price at around $5.16 per gallon, followed by Pend Oreille and Spokane counties, with just under $5.30.

In Congress this year, Pacific Northwest lawmakers have taken lead roles in shaping the Democrats' response to higher gasoline prices.

Sen. Ron Wyden, the Oregon Democrat who chairs the Senate Finance Committee, plans to introduce a bill that would apply an additional tax of 21% to "excess profits of oil and gas companies," which could be applied to profits above a 10% return on expenses, according to a statement about the proposal released by a committee staffer.

Sen. Maria Cantwell, D-Wash., chair of the Senate Commerce, Science and Transportation Committee, is one of three West Coast senators to sponsor a bill to create a new unit within the Federal Trade Commission to watchdog markets for manipulations or unfair methods of competition used to increase profits, and follow up with investigations.

Rep. Kim Schrier, D-Sammamish, co-sponsored a bill passed by the House of Representatives in May that would empower the FTC to go after fuel price-gouging when a president declares an energy emergency.

Republicans have backed many of the proposals put forth by oil industry officials aimed at increasing oil production and easing regulation. In the run-up to the November midterm elections, they have sought to put the blame for higher gas prices on Biden and congressional Democrats.

"If Washington drivers want cheaper gas prices, they'll vote Kim Schrier out in November," said Courtney Parella, a regional press secretary for the National Republican Congressional Committee, in a Wednesday statement.