- House Democrats are putting more pressure on oil corporations to appear in upcoming hearings as Democratic leadership attempts to shift the blame on rising gasoline prices.
- President Joe Biden accused oil companies of padding their profits by keeping gasoline prices high while oil prices decreased, in a tweet Wednesday.
- “When it comes to oil and gas prices, many accept that gas prices rise quickly but fall slowly — the so-called ‘rockets-and-feathers’ phenomenon,” White House press secretary Jen Psaki told reporters later in the day. “But President Biden rejects that. Americans deserve relief, and fast, as oil prices fall.”
House Democrats are putting more pressure on oil corporations to appear in upcoming hearings as Democratic leadership attempts to shift the blame on rising gasoline prices.
House Natural Resources Committee Chairman Raúl Grijalva sent letters to executives of three mid-size U.S. oil corporations — EOG Resources, Devon Energy Corporation and Occidental Petroleum — on Friday, asking them to appear before the panel in early April to discuss rising gasoline prices. The hearing will focus on the companies’ rising profits and executives’ comments that the Biden administration is at fault for high gasoline prices.
Democrats also plan to grill the CEOs on why they aren’t utilizing many federal leases on which they could immediately drill, Politico reported. Industry groups have pushed back on this argument, saying that most leases are being used and unused ones have little resources to extract or are being held up by lawsuits and permitting.
“While there is no denying that Putin’s war has led to instability on global energy markets, I remain concerned that the oil industry is not doing enough to protect American consumers from rising gas prices,” Grijalva wrote to the CEOs on Friday.
In the wake of Russia’s military invasion of Ukraine, global crude oil and gasoline prices have skyrocketed on market uncertainty. The average price of gasoline in the U.S. peaked near $4.33 per gallon last week and has since declined, AAA data showed.
On Wednesday, House Energy and Commerce Committee Chairman Frank Pallone sent letters of his own to CEOs of four Big Oil companies — ExxonMobil, BP, Shell and Chevron — as well as Pioneer Natural Resources and Devon Energy Corporation. He asked them to testify at a committee hearing on April 6.
ExxonMobil and Chevron said they were aware of the letters and reviewing the request in statements to the Daily Caller News Foundation.
Senate Democrats also suggested the Budget Committee which Vermont Sen. Bernie Sanders chairs would hold similar hearings in the future, according to Insider.
Beyond calling oil executives to answer their questions under oath, Democratic lawmakers have also proposed a new windfall tax that would create a rebate for consumers as prices increased. Rhode Island Sen. Sheldon Whitehouse, one of the proposal’s architects, said oil companies were “taking advantage of an international crisis.”
President Joe Biden similarly accused oil companies of padding their profits by keeping gasoline prices high while oil prices decreased, in a tweet Wednesday. The tweet included a graph showing gas prices staying high as oil prices fell.
However, the benchmark U.S. oil index has increased about $8 per barrel since the president’s tweet.
“When it comes to oil and gas prices, many accept that gas prices rise quickly but fall slowly — the so-called ‘rockets-and-feathers’ phenomenon,” White House press secretary Jen Psaki told reporters later in the day. “But President Biden rejects that. Americans deserve relief, and fast, as oil prices fall.”
“I will reiterate what the President said to oil and gas companies last week: The invasion of Ukraine and the volatility of the oil market is no excuse for excessive price increases, profit padding, or any effort to exploit American consumers,” she added.
Oil prices are decreasing, gas prices should too.
Last time oil was $96 a barrel, gas was $3.62 a gallon. Now it’s $4.31.
Oil and gas companies shouldn’t pad their profits at the expense of hardworking Americans. pic.twitter.com/uLNGleWBly
— President Biden (@POTUS) March 16, 2022
Several experts, though, have pushed back against the allegations, saying that there is a lag time between oil prices falling and prices at the pump following. A 2014 Energy Information Administration report also noted that gas prices generally follow suit “within two weeks of the price change.”
“It’s the manner in which the business of gasoline distribution operates, where there is ALWAYS a lag between oil prices and pump prices,” Dallas Federal Reserve energy economist Garret Golding tweeted on Wednesday.
“After any oil price surge, stores are cautious with how quickly they drop their prices, fearing oil prices could jump up again,” he continued. “Historically it happens very slowly.”
Phil Verleger, a senior climate fellow specializing in industry analysis at the Niskanen Center, said that the more than 100 investigations and legal challenges brought by federal regulators, consumers and states alleging that oil companies were price gouging have all “flopped,” USA Today reported. In November, Biden asked the Federal Trade Commission to open a fresh probe into the industry’s alleged profiteering.
Overall, 30% of Americans pinned surging pump prices on Biden while 23% said oil companies were to blame, according to a recent survey conducted by Yahoo News and polling firm YouGov. A whopping 77.3% of American voters said Biden should increase domestic production in light of the Ukraine crisis, a poll from The Trafalgar Group found.
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