Democrats accuse oil firms of ‘rip off’ on gasoline costs | Enterprise

WASHINGTON — House Democrats on April 6 accused oil firms of “ripping off the American people” and placing income earlier than manufacturing as Americans undergo from ever-increasing gasoline costs amid the conflict in Ukraine.

“At a time of record profits, Big Oil is refusing to increase production to provide the American people some much needed relief at the gas pump,” stated Rep. Frank Pallone, D-N.J., chairman of the House Energy and Commerce Committee.

Oil executives, testifying earlier than Congress for the second time in six months on Wednesday, responded that oil is a world market and that their firms do not dictate costs.

“We do not control the market price of crude oil or natural gas, nor of refined products like gasoline and diesel fuel, and we have no tolerance for price gouging,” stated Chevron CEO Michael Wirth.

The listening to comes as President Joe Biden has ordered the discharge of 1 million barrels of oil per day from the nation’s strategic petroleum reserve for six months in a bid to manage vitality costs which have spiked because the United States and allies have imposed steep sanctions on Russia over its invasion of Ukraine. The nationwide common gasoline value was $4.16 a gallon for normal on Wednesday, up from $2.87 a yr in the past, in line with AAA. In South Carolina, the determine has climbed 47 % to about $3.83 over the identical interval, the journey group stated. 

Biden and different Democrats have blamed Russian President Vladimir Putin and the U.S. oil business for the rise, citing reviews that oil firms have made report income in current months as costs have risen following Russia’s invasion of Ukraine.

“This is the Biden price hike,” countered Rep. Cathy McMorris Rodgers of Washington state, the committee’s top Republican.

Noting that prices were increasing before Russia invaded Ukraine in late February, McMorris Rodgers said Americans “are too good and haven’t fallen for this” claim by Biden and other Democrats. She called the hearing “purely political.”

ExxonMobil CEO Darren Woods said Exxon has halted investments in Russia and is withdrawing from operations there. The company is increasing production in the United States, Woods said, including in the oil-rich Permian Basin in New Mexico and Texas. Exxon also is increasing production outside the U.S., including “a world-class improvement in Guyana,” Woods stated.

Under questioning from Pallone, Woods and different CEOs stated oil firms don’t have any plans to halt funds of dividends to stockholders or to limit inventory buybacks which have enriched shareholders and firm executives. The six firms on the listening to recorded $77 billion in income final yr, they instructed Pallone.

Rep. Kim Schrier, D-Wash., stated gasoline costs are near $5 per gallon in her Seattle-area district. Her constituents “are mad, and they should be,” she said, citing the record profits oil companies are reaping.

“This looks like gouging. It even looks like profiteering,” Schrier stated. Prices on the pump haven’t gone down in current weeks together with crude oil costs, she and different Democrats famous.

At a time of conflict and excessive costs, “oil companies should not be sending profits back to shareholders,” she said, urging oil executives to restore production to pre-pandemic levels.

Wirth, the Chevron CEO, said his company produced a record amount of oil in 2021, while also making sure to “return worth to shareholders” by way of increased dividends and inventory buybacks.

“They’re not mutually exclusive. We can do both,” he said.

Biden has called on Congress to impose financial penalties on companies that lease public lands but don’t produce oil, a request that so far has been ignored. Biden also invoked the Defense Production Act to encourage mining of critical minerals for batteries in electric vehicles, part of a broader push to reduce use of fossil fuels and address climate change.

“The backside line is that if we would like decrease gasoline costs we have to have extra oil provide proper now,” Biden said last week in announcing the release of oil from the strategic petroleum reserve. “This is a second of consequence and peril for the world and ache on the pump for American households.”

Higher prices have hurt Biden’s approval domestically and added billions of oil-export dollars to the Russian government as it wages war on Ukraine.

The release of oil from the U.S. stockpile could reduce oil prices, although Biden has twice ordered releases from the reserves without causing a meaningful shift in oil markets. Biden said last week he expects gasoline prices could drop “pretty considerably.”

Oil firms have pledged to spice up home manufacturing, however it’s rising slowly. Executives level to produce chain and labor constraints on account of the COVID-19 pandemic, in addition to investor calls for for returns. They have referred to as for extra federal permits to permit further leases.

Besides Exxon and Chevron, different firms represented on the listening to had been Shell, BP, Pioneer Natural Resources and Devon Energy.

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