No, Gas Prices Didn’t Spike Because of ‘Corporate Greed’

The price of gas keeps rising.

“The reason for that is because of Putin’s war,” said President Joe Biden.

But that’s impossible. Most of the price rise came before Russian President Vladimir Putin attacked Ukraine.

So some politicians simply blame “corporate greed.”

Sen. Sheldon Whitehouse (D–R.I.) accuses the oil industry of collecting “excess profit.”

Sen. Elizabeth Warren (D–Mass.) even introduced a bill to ban “price gouging.”

This is just economic ignorance, as my new video explains.

“If big oil could raise prices anytime they wanted and get away with it, then why were they so cheap in 2020, 2019, 2018?” asks the Competitive Enterprise Institute’s Ben Lieberman.

Lieberman points out that companies are always greedy. Greed didn’t just start now. They were just as greedy when gas prices fell in 2019 and early 2020.

“It all comes down to cutting back on supplies,” says Lieberman.

It’s not complicated. Prices change because of supply and demand.

During the COVID-19 pandemic, fewer people drove, and demand for gasoline dropped. So did its price. Oil drillers then did less drilling. Now demand is up because people are driving again.

But it takes time for producers to adjust.

“It takes months, not days, for a company to increase production,” says Biden.

I’m relieved that the president understands that, but he ignores how his own policies reduce production and raise the price of gas. He didn’t mention that when he canceled a long-planned sale of offshore oil rights this week.

Activists want Biden t