Energy prices have shot up by more than a third since President Biden assumed office in 2021 as stubborn inflation continues to tax Americans.
The Labor Department's new Consumer Price Index (CPI) report on Tuesday showed that gasoline and housing costs were the biggest drivers of a 0.4% increase in March. Prices climbed 3.5% from the same time last year, higher than economists had predicted. Oil prices have reached a five-month-high.
"There is no improvement here, we’re moving in the wrong direction," said Greg McBride, chief financial analyst for Bankrate.
"The usual trouble spots persist — shelter, motor vehicle insurance, maintenance, and repairs, service costs. Add electricity to that list, up 0.9% in March and 5% over the past year," he added.
INFLATION ACCELERATES MORE THAN EXPECTED IN MARCH AS HIGH PRICES PERSIST
Tuesday's inflation numbers punctuate what has been a dreadful three years for energy consumers. The overall cost of energy in March is up 36.9% from where it was in Jan. 2021, according to the Department of Labor's Bureau of Labor Statistics.
All categories of energy are more expensive today than three years ago. In Jan. 2021, electricity cost $0.14 per kilowatt-hour and as of March 2024 it costs $0.17, an increase of 28%.
Every driver in America knows that gasoline prices surged to exorbitant highs in 2022, following international disruptions in oil production as a result of war between Russia and Ukraine. Prices have since come down, but overall gas still costs 52.1% more today than when Biden became president. On Jan. 18, 2021, the average price per gallon of gas was $2.38, and today it is $3.62, according to data from the Energy Information Administration.
Diesel prices tell a similar story, increasing 50.4% over the last three years, from $2.70 per gallon in Jan. 2021 to $4.06 per gallon today.
JAMIE DIMON WARNS INFLATION, INTEREST RATES MAY REMAIN ELEVATED
Biden, who is running for re-election in 2024, has sought to combat rising energy prices by ramping up government spending on clean energy alternatives.
The Inflation Reduction Act (2022) invested $369 billion in what Democrats labeled "Energy Security and Climate Change" provisions, translating to billions of dollars of incentives and tax breaks intended to reduce carbon emissions 40% by 2030. The law offset those costs with a new 15% Corporate Minimum Tax and additional funding for the Internal Revenue Service to crack down on tax avoidance.
On Friday, the White House announced $20 billion in IRA funding will be distributed by the Environmental Protection Agency to nonprofits that will fund tens of thousands of clean energy projects across the country. The administration has also made verbal commitments to phase out coal power plants nationwide, joining 56 other nations in the Power Past Coal Alliance.
Additionally, a Wall Street Journal analysis found that the Biden administration has leased fewer acres for oil-and-gas drilling offshore and on federal land than any other presidential administration dating back to World War II.
BIDEN ADMIN CANCELS PLAN TO REFILL EMERGENCY OIL RESERVE AMID HIGH PRICES
However, critics say the president's pursuit of clean energy is out of touch and point to Tuesday's CPI report as evidence the Inflation Reduction Act failed.
"In that law, Joe Biden and his supporters celebrated the passage of the largest green energy slush fund in history and all it is delivering are higher prices across the board," said Daniel Turner, founder and executive director for Power the Future, a leading energy industry group.
"Since day one in office, Joe Biden continues to pursue an agenda that is detached from common sense but hits every American right in the pocketbook," Turner added.
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Despite Biden's commitments to clean energy, inflation forced the president to take action, and he began draining the Strategic Petroleum Reserve (SPR) in late 2021 to combat high fuel prices. The president also traveled to Saudi Arabia in 2022 in part to ask OPEC nations to increase oil production.
Last week, the Biden administration canceled a plan to purchase up to 3 million barrels of oil to replenish the SPR amid rising oil prices.
"Thanks to Joe Biden, American families are struggling to stay out of the dark, and it has nothing to do with an eclipse," Turner said. "Americans are paying massive costs both at the pump and on their electric bill and all Joe Biden offers are pathetic gimmicks such as draining the SPR, begging Saudi Arabia for more oil and then blaming all his failures on Russia."
