Oil prices plunged more than 5% on Wednesday as the U.S. President Joe Biden is pushing for a tax cut on fuel in order to lower the costs for drivers.
The international benchmark Brent crude fell 4.53% to $109.46 per barrel, while the West Texas Intermediate plunged 5.05% to $103.98 per barrel.
On Wednesday, Biden is expected to ask the Congress to give a green light to cut federal taxes by 18.4 cents per gallon on gasoline for three months. However, lawmakers from both parties showed resistance toward the move.
PVM Oil Associates Stephen Brennock stated that the latest in a long line of attempts to temper surging prices at the pumps is having the desired effect. Yet whether this knee-jerk reaction will stand the test of time is by no means guaranteed. He also pointed to an expected summer demand surge.
The announcement is expected at 1800 GMT.
A week ago, Biden slammed on major oil refinery companies in the U.S., demanding them to take immediate actions to ramp up supply while adding that historically high profit margins are unacceptable at a time when Americans continue to see soaring prices at the gas pump.
The president is expected to meet with seven oil companies this week to discuss more production output and reduce fuel prices of around $5 a gallon after oil companies made record profits.
Chevron CEO Michael Wirth hit back at the president, saying that criticizing the oil industry was not the way to bring down fuel prices and adding that the government had to change its approach.