Could Biden Invoke Defense Production Act To Raise Fuel Production?

US President Joe Biden may use the Cold-War era “Defense Production Act” To stimulate fuel production.

Several US news reports have said that Biden is open to using all possible cards and reasonable tools the federal government has to increase fuel production and lower fuel prices for Americans, including the said emergency Act.


In a letter to US oil companies, Biden wrote that “At a time of war, refinery profit margins well above normal being passed directly onto American families are not acceptable.”

Commenting on the letter, the White House press secretary said that “President Biden is putting a spotlight on this and calling on oil refiners to invest those records; those record profits to increase capacity so cost at the pump could come down.”

He is signaling that he is prepared to use any emergency tools he has, but these companies have a responsibility to step up too. We are focused on getting to solutions.

Rallying oil prices, recovering demand post-COVID, and constrained refining capacity are the key reasons for record-high fuel prices in the US and many other countries. In America, national average fuel prices hit $5 per gallon last week, the highest ever, in a major blow to the Biden Administration and Democrats ahead of the mid-term elections in November.