President Biden is releasing 180 million barrels of oil out of our national strategic reserves to try to reduce high gas prices
This is not a supply issue. This is a demand issue.
President Biden is releasing 180 million barrels of oil out of our national strategic reserves to try to reduce high gas prices. This is not a supply issue. This is a demand issue. The president is going to be releasing roughly a million barrels of oil a day every day for six months. Our emergency stockpile is 568 million barrels. We created that stockpile after the oil embargo of the 70s. Back then, we couldn't get gas. Do you remember? You could only buy gas every other day of the week based on your license plate. We created the stockpile in case our gasoline supply was again cut off. Right now, we don't have a lack of supply. First of all, we're producing more oil domestically than we ever have in our history. Supply is not the issue. It's a matter of price for that gasoline. Because of the war with Russia and Ukraine, the oil markets are going crazy and gasoline prices are at an all time high, over $6 a gallon in some states.
Ric Edelman: So the President acquiescing to voter backlash over the incredibly high cost of filling your gas tank, is trying to figure out ways to lower the price of gas. First, let's release more oil from the strategic reserve. 180 million barrel release. This is the biggest release from our stockpile ever, four times more than the government has ever done. And simultaneously, it'll leave us with the lowest level of reserves since 1984. And here's the problem: it's only going to cut gas prices $0.05 to $0.10 a gallon. So instead of paying $6, you're paying $5.95. And that reduction is only going to last for a few months while they're sending a million barrels a day. After that, the price is just going to go right back up to where we were before, except that we're not going to have 180 million barrels of oil anymore. This strategy is ill-conceived and ill-executed. It isn't going to improve the economy. It isn't going to reduce gasoline inflation. It isn't going to save you a material amount of money. It's not going to work. What it is going to do is weaken our strategic reserves. Washington is also talking about freezing the federal gas tax. It's $18.4 cents a gallon. They're talking about eliminating that tax through the end of the year.
Ric Edelman: A bunch of states are taking a similar action. Maryland, Georgia, Connecticut, they've all suspended their gas taxes. Other states may follow. Maryland's gas tax, $0.36 a gallon. Georgia, $0.25. In Ohio, they want to eliminate the gas tax over a five year period. They say doing so would cost $4 billion. Here's the problem: just because gas prices are high doesn't mean that the government doesn't need to collect the gas tax. I mean, I'm assuming that they were charging a gas tax because they needed the revenue to pay for transportation expenses, you know, building and maintaining roads and bridges and tunnels and other costs of operating the government. Just because we're complaining about high gas prices doesn't mean that the government can suddenly afford to eliminate the gas tax. That means we're going to have pressure in raising the tax revenue the government needs to operate. It means that other taxes are going to have to go up, and if other taxes aren't going to have to go up, meaning the government can indeed afford to eliminate the gas tax, then why haven't they done it already? Why is it only taking this crisis to eliminate unnecessary taxes? Something's wrong here, and I'm not quite sure what it is. But I think this is all contributing to everybody's anger and malaise over what's happening with inflation overall and inflation and gas prices at the pump in particular. The government's responses of going into our strategic reserves and eliminating gasoline taxes are short-lived, ill-advised strategies. And it's going to make your personal finances more challenging in the long run.