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The White House appears to be weighing options to combat record diesel prices.
President Donald Trump reacts to the crowd on Sunday during a stop at the Presidents Cup gold tournament in Medinah, Illinois. Trump's latest comments come as the administration considers a series of options — some publicly pushed by top aides — amid high fuel prices just 36 days ahead of the midterm elections.
Other options include formally asking oil producers for a"voluntary" ban or limit on exports, suspending the federal diesel excise tax, and getting states further involved. Trump's team has repeatedly stressed that many options remain open.
"No policy decision has been made at this time," especially in the direction of a ban, a White House official told Yahoo Finance on Monday. The president"is evaluating all the options on the table.
", a slight decrease from last week's all-time record high of $6.52 per gallon. But economists warn that a full ban on domestic exports would have wide-ranging and potentially destabilizing effects on the global economy. A new analysis from Oxford Economics found that a ban could provide immediate price relief in at least some regions of the US — to the tune of prices dropping roughly 30% within weeks — but the effects wouldn't be felt evenly across the US.
Beyond that, a ban would raise prices elsewhere in the world, including a possible 40%-50% jump in European wholesale prices. A range of experts have also warned that a US export ban could lead US refineries to cut output, making any US price relief a short-term affair. ·The spike in diesel prices has led to a scramble within the Trump administration for alternatives, with early voting in some states set to begin next week.
Republicans facing headwinds have been urging the White House to act, especially in farm states that are particularly affected by high diesel prices during the current harvest season. But the Trump administration has limited options. Global fuel markets have seen high prices due mainly to restrictions in the Strait of Hormuz and to Ukrainian attacks on Russian refineries.
Energy Secretary Chris Wright said last week that such an option could be fruitful and that the administration is working with refiners on voluntary export curbs.
"We're trying to avoid a blunt hammer of a government policy, understanding the complexity of refining," Wright saidThat approach has seen some support in farm country. Sen. Chuck Grassley of Iowa has been a leading voice calling for an export ban, but he recently hinted he might be open to a voluntary approach. ,"tell Big Oil 2reduce their prices 4 Americans/not charge global price ... this is an America 1st issue.
" Energy Secretary Chris Wright is seen at a press conference in Vienna, Austria on September 14. Another option on the table — and one being pushed by oil companies — is to suspend the federal diesel excise tax or some regulations, which they say could ease prices in the US. The American Petroleum Institute recently said in a statement that a blanket ban"would only compound the problem" and that"the answer is more supply and more flexibility.
" But it's unclear if a tax suspension could be implemented quickly — and without action in Congress, which is unlikely with most lawmakers already at home for the campaign season. The White House also appears to be urging states to take action, with some progress already in evidence.
Nebraska and other agriculture-heavy states have announced emergency plans to waive taxes on certain types of diesel to ease pressure on farmers and consumers.that included a 90-day suspension of diesel taxes for vehicles involved in agriculture or ranching.
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