By Selena Fragassi, GO BANKING RATES
September 2, 2022
The pain at the pump in 2022 was felt by all Americans as the price to fuel up topped $6 a gallon in some places, like California. In light of oil companies bringing in record profits as consumers foot the bill, many lawmakers have called on executives to be more transparent about their surpluses — and how that money is being used.
On Aug. 3, the House Committee on Energy & Commerce reported that Committee Chairman Frank Pallone, Jr. (D-NJ) had been in touch with four of the major oil companies asking for this clarity, demanding to know how profits are being used and what the companies were doing to help curb gas prices.
As noted in the statement, the quarterly earnings of the top four companies was almost $50 billion combined, including Exxon reporting profits of $17.9 billion (which the committee noted is the highest quarterly profit of any oil company in history), Chevron reporting $11.6 billion, Shell reporting $11.47 billion and BP reporting $8.45 billion.
Pallone wrote in his letters to each company, “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.”
His outreach follows similar motions in March, as well as a committee hearing with oil CEOs in April. While the pressure on oil companies has likely led to prices going down somewhat in the past several weeks — CNBC reported in mid-August that the national average for a gallon of gas is now $3.99 and has fallen for the last 58 market sessions — lawmakers are still keeping an eye on the situation.
In California, a new bill is now on Gov. Gavin Newsom’s desk — one that would require oil companies to record these large profits on a monthly basis. Doing so would help shed light on “the difference between average cost they pay for a barrel of crude oil and the average price they charge for the finished barrel of gasoline,” per Consumer Watchdog, who published a press release about the initiative. Such an initiative is particularly relevant in California, where drivers are paying $1.25 more per gallon than other drivers across the nation, as noted by the press release.
The SB 1322 bill, introduced by California Senator Ben Allen, passed the state Senate by a vote of 29-8. As Allen said via press release, “California drivers have had enough. SB 1322 will bring much-needed transparency to oil companies’ true costs of doing business.”
Jamie Court, president of Consumer Watchdog, also noted the disparity, stating, “Recent quarterly profit reports suggest California oil refiners are pocketing more than $1 per gallon off the recent price spikes at the pump. That’s unconscionable.”
As the press released indicated, the bill has support from the California attorney general, California Public Interest Research Group, Greenpeace USA, SoCal 350 Climate Action, Public Watchdogs and other environmental and social policy groups.