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Gas prices: Biden administration 'making sure consumers are not taken advantage of,' official says

Americans across the country are feeling the cost of war as they head to the gas pumps.

Gas prices haven't yet reached record highs (when adjusted for inflation), but they are at levels not seen since 2008 as a result of the Russian invasion of Ukraine and ensuing sanctions.

On Tuesday, President Biden announced the ban on Russian energy imports — and warned about the ripple effects for regular Americans.

And according to Brian Deese, director of the White House's National Economic Council, the Biden administration is “looking at everything we can do to mitigate the impacts here at home, including obviously the price of gas at the pump.”

One of the administration's priorities is "making sure consumers are not taken advantage of," Deese said on Yahoo Finance Live (video above), adding: "It's at moments of volatility like this that you worry the most about gas stations taking advantage of the situation and driving up prices, particularly in the near term, based on the oil they already have in reserves. Those are the kinds of things we’ve got our regulatory bodies — the FTC and the CFTC — looking closely at.”

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'There are costs to his completely unjustified aggression'

As of March 9, the states with the highest average gas prices are California, Hawaii, Nevada, Oregon, Washington, and Alaska — all West Coast states, according to the latest data from AAA (Today’s national average is $4.25 a gallon). About half of the oil that the U.S. was importing from Russia had been going to these states.

Vladimir Putin’s “price hikes are having an impact and going to have an impact,” Deese said. “As the president said, we’re going to do everything we can to mitigate it but there are costs to his completely unjustified aggression in Ukraine.”

California, in particular, has seen significant increases with San Francisco and Los Angeles surpassing more than $5 a gallon. The state’s environmental laws play a significant role here. According to the Los Angeles Times, the regulations “require refiners to follow specific gasoline formulas designed to reduce air pollution when the temperature is high.” Additionally, the state has special tax premiums on motor fuels that factor into gas prices.

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“In the short term, we absolutely recognize that people are needing to drive to get to work and get to the grocery store,” Deese said. “When the price of gas goes up, that hits people in their pocketbooks, which is why we’re doing everything we can in the short term. Over the longer term, this crisis should underscore the only way to reduce our dependence on oil is to use less oil.”

The U.S. is also working with international allies that have oil reserves to bring that into the market. Earlier this month, the International Energy Agency (IEA) released 60 million barrels of oil in order to ensure there would be no supply issues stemming from the conflict with Russia. According to Deese, the U.S. is in “active discussions” with the IEA about how and when they can do more.

A person takes photographs of gas prices above $6.00 and $7.00 a gallon at a Shell gas station in Los Angeles on March 8, 2022. (Photo by Patrick T. FALLON / AFP)
A person takes photographs of gas prices above $6.00 and $7.00 a gallon at a Shell gas station in Los Angeles on March 8, 2022. (Photo by Patrick T. FALLON / AFP)

In the meantime, Deese added, the best thing that the U.S. government can do is “provide direct relief to American families, lower their costs, and do so in a way that actually lowers the deficit at the same time. That will ease inflationary pressure over time while actually addressing some of the pocketbook concerns that individual families are facing, and that could provide a headwind to the economy.”

Overall, the White House is taking an optimistic view of the current situation.

“I would say in terms of the economy, what’s notable is the extraordinary resilience of the American economy, even through these uncertain periods,” Deese said. “We’ve been through multiple waves of the pandemic. We now have an unprecedented geopolitical situation. What you see is historic strength in the labor market continuing, the American consumer and consumption holding up. There are risks, absolutely. Really what’s notable is the resilience of the American economy uniquely among global economies.”

Adriana Belmonte is a reporter and editor covering politics and health care policy for Yahoo Finance. You can follow her on Twitter @adrianambells and reach her at adriana@yahoofinance.com.

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