Big Oil executives defend high fuel prices in U.S. congressional hearing

On March 7, 2022, petrol leaked from a gas station mechanic’s terminal in Somerville, Massachusetts, USA. REUTERS / Brian Snyder / File Photo

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WASHINGTON, April 6 (Reuters) – Oil executives in the U.S. House of Representatives on Wednesday defended themselves against accusations by lawmakers of boosting energy production and evading Americans’ high fuel prices, saying no company had set petrol prices.

Lawmakers overseeing and investigating the U.S. House of Representatives’ Energy and Trade subcommittee are investigating grill companies as to why petrol prices have risen despite lower crude oil prices.

Following Russia’s occupation of Ukraine, US petrol prices soared and Western nations imposed sanctions on Moscow’s energy exports. Pump prices hit a record high of $ 4.33 per gallon on March 11, then fell 4% to $ 4.17 per gallon on Wednesday, according to the AAA Motor Driving Board.

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International crude oil prices have fallen sharply, from a high of $ 139 per barrel in early March to about $ 107 on Tuesday, a 23% decline, and the future of unfinished petrol is down about 15%. (Graphic: Retail – Wholesale Gap)

“These prices are controlling the budget and patience of our constituencies,” said Diana Dickett, a U.S. Democrat and chairwoman of the House of Representatives.

Administrators of Exxon Mobil (XOM.N)Chevron (XOM.N)BB USA (PPL)Shell USA, Devon Energy Corp. (TVNN) And pioneer natural resources co (PXD.N)Testified.

DeGette questioned the billions of dollars in profits made by the companies involved in the investigation, citing the $ 30 billion in taxpayer subsidies they receive as a reason to help reduce petrol prices.

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Republican representatives at the trial, including Morgan Griffith of the U.S. House of Representatives in Virginia and Kathy McMorris Rodgers of the U.S. House of Representatives, blamed President Joe Biden’s policies for high pump prices, including the decision to revoke a key permit for the Keystone XL pipeline.

“When future production is clearly blocked by this administration, it is not possible to build confidence or invest in production today,” Griffith said.

Mike Wirth, CEO of Chevron, says fuel prices are determined by market dynamics, which companies do not have much control over.

“Changes in the price of crude oil do not always lead to immediate changes in the pump,” Wirth said.

Biden, a Democrat, last week urged oil companies to increase production and serve American households instead of investors. read more

Wirth reiterated Chevron’s plans to raise capital expenditure by 50% this year, half of which will go to oil and gas production and half to renewable fuels and less carbon.

Exxon, the United States’ leading oil company, said on Monday that first-quarter results would top the seven-year quarterly record. Revenues from other oil companies are also likely to rise after Russia’s invasion raises energy prices. read more

“No company sets the price of oil or gasoline,” said Darren Woods, president and chief executive of Exxon. “Establishes market price based on available supply and demand for that supply.”

Gretchen Watkins, president of Shell USA, said his company does not control or own the 13,000 gas stations that carry its brand. “Each of these independent businesses is responsible for setting the local retail price of gasoline.”

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Scott Sheffield, the pioneer’s chief executive, said it would take time to upgrade the company’s production in the Permian Basin, citing labor and supply chain shortages and the elimination of multiple rigs and hydraulic fracturing flies when prices are lower in 2020.

Retail petrol prices are higher than wholesale prices due to refinement, transportation, marketing and taxes, and the gap between the two is volatile – retail prices often fall slowly.
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Report by Timothy Gardner, David Shepherdson in Washington, Liz Hampton in Denver and Sabrina Vale in Houston; Editing by Richard Bullin, Jonathan Odyssey and David Gregorio

Our standards: Thomson Reuters Trust Principles.

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