Gasoline drips from a nozzle held by a gas station mechanic in Somerville, Massachusetts, U.S. March 7, 2022. REUTERS/Brian Snyder/File Photo
WASHINGTON, April 5 – U.S. oil executives will tell Congress on Wednesday that they are increasing energy production and no company is setting the price of gasoline, according to previously released written statements, as they address lawmakers’ accusations of gouging high fuel consumption defend prices.
Lawmakers on the US House of Representatives’ Subcommittee on Oversight and Investigations on Energy and Commerce hold the hearing, scheduled for 10:30 ET (14:30 GMT) to brief companies on why gasoline prices, despite crude oil prices, the feedstock for fuels, remaining high, have declined.
US gasoline prices, buoyed by Russia’s invasion of Ukraine and Western sanctions on Moscow’s energy exports, slipped about 4% before inflation adjustments on the 11th.
International crude prices, meanwhile, have fallen much more sharply, from a peak of more than $139 a barrel in early March to around $107 on Tuesday, a 23% drop.
“We will not sit back and allow the fossil fuel industry to take advantage of the American people and outdo them at the gas pump,” Diana DeGette, a Democrat and subcommittee chair, said of the hearing at which executives from Exxon Mobil (XOM .N), Chevron (XOM.N), BP America (BP.L), Shell USA, Devon Energy Corp (DVN.N) and Pioneer (PXD.N) will testify.
“We want to know what is causing these record prices and what needs to be done to bring them down immediately,” she said. Many Democrats have complained that oil companies have reaped record profits while consumers face high prices.
Oil majors will say that labor and supply shortages are preventing oil production from quickly returning to pre-pandemic levels and that prices will be determined by the international market.
Chevron chief executive Mike Wirth will say that fuel prices are driven by market dynamics over which companies have little control.
“Changes in the price of crude oil do not always lead to immediate changes at the pump,” says Wirth. “And while the price of crude oil may fall faster, it often takes longer for competition between stations to bring prices at the pump back down.”
Last week, President Joe Biden, a Democrat, urged oil companies to increase production and serve American families instead of investors when he announced a record release of oil from strategic reserves. Continue reading
Chevron plans to increase capital spending by 50% this year, with about half of that going to increase oil and gas production and the other half to renewable fuels and lower-carbon energy, Wirth will say of previously announced targets.
Exxon, the top US oil company, said Monday its first-quarter results could beat a seven-year record. The preview offered a signal of what’s in store for other companies’ oil earnings after the Russian invasion pushed up energy prices. Continue reading
“No single company sets the price of oil or gas,” Darren Woods, Exxon chairman and chief executive officer, will say, according to testimony. “The market sets the price based on the supply available and the demand for that supply.”
Shell USA President Gretchen Watkins will say her company neither controls nor owns the 13,000 gas stations that carry its brand. “Each of these independent companies is responsible for setting the local retail price of gasoline.”
Scott Sheffield, CEO of Pioneer, the top producer in the Permian Basin, will say oil companies are not turning on the taps quickly due to labor and supply chain shortages and the shutdown of many rigs and hydraulic fracturing fleets when prices were low may 2020.
Reporting by Timothy Gardner, David Shepardson in Washington, Liz Hampton in Denver and Sabrina Valle in Houston; Adaptation by Richard Pullin