Government Reacts to Climbing Gas Prices

Government Reacts to Climbing Gas Prices

Nathan Reid, Journalist

The Russian-Ukrainian war has just reached five weeks of fighting. A key resource we use everyday has been affected by this conflict: oil prices. The conflict has impacted the prices of this commodity in the United States. The average price for gas is $4.23 per gallon, and the price has experienced over 100% increase from the same date last year. From this, a measure of bills have been brought to state and federal levels of legislature. Governor Gavin Newsom of California announced a gas rebate proposal for residents of up to $400. This would be a temporary way to offset the high gas prices in California, who at the moment has one of the highest dollar tags in the nation at $5.80.


Federally, Mike Thompson of California, John Larson of Connecticut, and Lauren Underwood of Illinois, planned a rebate bill for $100 a person when gas prices rose over 4 dollars. This rebate would be income-based, ending at $160,000 per year income where the rebate would no longer qualify. This plan would target the middle and lower classes, which have been affected the most by the gas hike. However, others look at taxing the oil companies instead of giving a rebate to the customers. Some house members proposed a bill for a tax on oil companies, citing record profits last year combined with alleged “profiteering” and “price gouging” from the war in Ukraine. The Big Oil Windfall Profits Tax from a representative in California and Rhode Island targets oil companies for the funding of the rebate towards Americans. This would tax the pre barrel price the companies set it at and hope to generate 45 billion in just this year. The Stop Gas Price Gouging Tax and Rebate Act also look at taxing the revenue at a “one time, 50% windfall profit tax” that would act the same way as the other rebates in an income-structured check amount.


However, pushback exists against the gas rebate option for the Gas Rebate Act. The Senate finance ranking member Michael D. Crapo saw the bill as adding more federal spending to the “supply and demand economy that we live in”. This opposition claims a rebate can add to already high inflation numbers, further hurting the economy. Reason Magazine states, “handing out government money to thwart high gas prices is like—pardon the pun—pouring gasoline on a fire.” The criticism is that this rebate will only continue to keep inflation in a harmful place.


More recently, there have been discussions by the Biden administration to tap into as many as 1 million barrels per day of oil from the strategic petroleum reserves in order to increase supply. The reserves contain approximately 568 million barrels of oil. This is one of the solutions being considered to combat climbing oil prices.