WASHINGTON, D.C. April 6, 2022 (UPI) — A panel of oil company executives will appear in Congress Wednesday to face questions from lawmakers about rising oil and gas prices, their soaring profits and concerns about price gouging amid record prices at the pump.
The executives from some of the world’s largest oil companies will appear before the House energy and commerce committee at a hearing titled, “Gouged at the Gas Station: Big Oil and America’s Pain at the Pump.”
The hearing is scheduled to begin at 10:30 a.m. EDT.
U.S. gas prices have been on the rise over the past several weeks, with the national average reaching a record high of $4.32 per gallon early last month, according to AAA. They are presently highest in California, with an average of $5.82 per gallon, and are above $5 in two other states — Hawaii ($5.23) and Nevada ($5.16).
A fueling station in Furnace Creek, Calif., posted what are believed to be the highest prices anywhere in the nation — around $9 per gallon.
There are a number of factors that go into what determines the final cost of gasoline — state taxes, proximity to refineries, national and global market fluctuations and supply and production conditions.
The rise in prices also has corresponded with Russia’s invasion of Ukraine on Feb. 24, which prompted a surge in crude oil prices, with West Texas Intermediate — the U.S. benchmark — reaching as high as $123.70. President Joe Biden has also banned imports of Russian-made oil to tighten the screws economically against Moscow for its bloody campaign.
Nonetheless, there are concerns among lawmakers and consumers about possible gas price gouging — a situation in which gas companies or station owners exploit a particular situation to hike prices at the pump beyond what the market says they should be. These concerns have only been amplified by reports of record or near-record profits from the oil companies.
Scheduled to testify in the House on Wednesday are bp America President David Lawler, Chevron CEO Michael Wirth, Devon Energy Corp. CEO Richard Muncrief, ExxonMobil CEO Darren Woods, Pioneer Natural Resources CEO Scott Sheffield and Shell USA President Gretchen Watkins. Also scheduled to testify is Hoover Institution Senior Fellow and retired U.S. Army Lt. Gen. H.R. McMaster.
In prepared testimony, the executives cite various factors for the rising cost of fuel, including the fighting in Ukraine.
“Russia’s actions are playing a major role in driving up global oil and natural gas prices,” Lawler says in his opening remarks. “bp recognizes the pressure high energy prices place on people and businesses, and we are working hard to supply more energy to the world.
“In uncertain times, one of bp’s primary roles is to maintain the safe, secure supply of the energy on which societies depend. The importance of that role has rarely been clearer than in recent weeks.”
“The impact of the crisis in Ukraine on global oil and gas supply and prices put into stark relief the importance of American leadership on the world stage,” Wirth said in prepared remarks. “Disruptions in global energy supply can affect the strength of our economy and our communities and directly impact everyday Americans.”
Woods pointed to the Arab oil embargo in the 1970s, which saw oil prices rise rapidly as millions of barrels of oil were withdrawn from the global market, and noted that Russia accounts for 10% of the oil needed to meet global demand.
“A loss of this volume would dwarf the impact of the Arab oil embargo and represent the largest supply disruption in the history of our industry,” he said in his opening statement.
In her testimony, Watkins underscores that the oil companies are not responsible for setting their own prices — a traditionally popular response in the industry whenever there are accusations of gouging.
“Because oil is a global commodity, Shell does not set or control the price of crude oil,” she said. “Similarly, Shell does not set or control the price that consumers pay.
“Indeed, it would be illegal for Shell to do so because nearly all Shell-branded retail stations in the United States are owned by independent operators who set their own prices in the marketplace.”
The executives largely agreed that increasing the oil supply represents an effective means to quell the rising gasoline costs — something that Biden has tried to do by tapping into the U.S. strategic reserve. The president announced last week that he’s ordered an extra 1 million barrels per day from the reserve for the next six months — a move that amounts to the release of 180 million barrels.
AAA said on Tuesday that Biden’s move has already had an impact on gas prices.
“[The release] helped send the global oil price tumbling to near $100 [per barrel],” it wrote. “The national average for a gallon of gas has fallen to $4.18.”
“The upward push on oil prices caused by Russia’s war in Ukraine is meeting stronger downward pressure from the planned [reserve] oil release and increased COVID fears in China,” added AAA spokesperson Andrew Gross. “And lower global oil prices are reflected in falling pump prices for consumers in the U.S.”
According to AAA on Wednesday, the national average is $4.16 per gallon.