Pallone Blasts Oil Companies Over Profits As Consumers Suffer at the Pump
WASHINGTON — Rep. Frank Pallone, Jr., D-N.J., chairman of the House Energy and Commerce Committee ripped into four major oil companies who reported record high profits in the first half of the year as consumers continued to suffer sticker shock at the pumps of their local gas stations.
In separate letters to the heads of ExxonMobil, Shell, BP and Chevron, Pallone effectively demanded to know how the companies could live with themselves, using their “windfall profits” for stock buybacks and other benefits for shareholders, while doing nothing “to reduce American’s pain at the pump.”
Though gas prices have been falling slowly but steadily all summer, drivers across the country continue to bear the burden of higher-than-average fuel costs.
According to AAA, the national average price for gas on Wednesday was $4.16, which is a marked decline from earlier this summer, but still about a dollar more expensive than this time last year.
In the meantime, the four major oil companies that are the focus of Pallone’s ire announced quarterly earnings of nearly $50 billion combined.
Exxon alone reported a profit of $17.9 billion — the highest quarterly profit reported by any oil company in history — while Chevron reported $11.6 billion, Shell reported $11.47 billion, and BP reported $8.45 billion.
‘These are record-shattering figures for the companies and the result of them reaping enormous profits on the backs of hardworking families,” Pallone said in a press release.
In his letters, Pallone noted that his House committee is currently investigating what oil companies could and should be doing to help bring down gas prices.
“As one of the largest private oil companies in the world, your company is positioned to help alleviate Americans’ pain at the pump, but I am concerned that you are more focused on rewarding company executives and shareholders,” he said.
“These misguided priorities are why I joined my colleagues to spearhead passage of the Consumer Fuel Price Gouging Prevention Act in May, which would be the first-ever federal statute against fuel price gouging,” Pallone continued.
“This bill would also increase penalties levied against market manipulators and price gougers that drive up fuel prices and would give the federal government better tools to bring enforcement actions against price gougers during energy emergencies declared by the president,” he said.
Pallone went on to request answers about how the companies’ profits will be used to increase executives’ compensation, stock buybacks, expenditures in support of fossil fuel production and expenditures in support of renewable fuels and decarbonization.
Though the price of gas has been declining, an uptick in demand during the last week of July has AAA concerned that as more people fuel up, the steady drop in daily pump prices will end.
“We know that most American drivers have made significant changes in their driving habits to cope with high gas prices,” said Andrew Gross, AAA spokesperson. “But with gas below $4 a gallon at nearly half of the gas stations around the country, it’s possible that gas demand could rise.”
According to new data from the Energy Information Administration, the demand for gasoline increased from 8.52 million b/d to 9.25 million b/d in late July.
The estimated rate is 80,000 b/d lower than last year, but it could slow pump price decreases if the trend holds. Additionally, total domestic gasoline stocks decreased by 3.3 million bbl to 225.1 million bbl, signaling that higher demand had reduced inventory.
New survey data from AAA found that drivers have been making significant changes to cope with high pump prices.
Almost two-thirds (64%) of U.S. adults have changed their driving habits or lifestyle since March, with 23% making “major changes.”
Drivers’ top three changes to offset high gas prices are driving less, combining errands and reducing shopping or dining out.