Big oil keeping prices high as crude prices drop

PROMO 64J1 Energy - Gasoline pump fuel money cash transportation - iStock - wingedwolf
Published Thursday, July 28, 2022
by Eric Galatas

(Wyoming News Service) A new analysis shows big oil companies are much more reluctant to lower gasoline prices when crude prices drop than they are to raise prices when crude costs rise.

In one example documented by the group Accountable.US, when crude prices dropped by just over 1 percent in April, oil companies raised gas prices by nearly 2 percent.

Jordan Schreiber, energy and environment director for the group, said consumers might expect prices at the pump to go down as the cost of crude oil drops, but gas prices remain stubbornly high.

"We would hope that the American people who have been really having a tough time paying for gasoline over the last few months would see some price drops," Schreiber noted. "But unfortunately, this is just another example of big oil really gouging folks at the pump."

After crude prices dropped by nearly 2 percent in May, companies raised gas prices by nearly 4 percent. In June, after crude dropped by more than 7 percent, it took days for prices to drop by just 2 percent. Industry groups have deflected criticism linking pricing to record profits, and have called on the Biden administration to open up more public lands for drilling to help ease prices.

Schreiber countered oil and gas companies left parcels of public lands they had specifically requested on the table at a recent drilling auction, and noted the industry already is sitting on thousands of untapped leases.

Schreiber believes the primary cause of high prices can be found in company ledger books. Last year, the top 25 oil and gas companies saw a record $237 billion in profits.

"We're looking at Quarter Two earnings calls this week, and we anticipate those to be record-breaking for 2022 as well," Schreiber pointed out. "The oil and gas companies have little to no incentive to actually bring this down. And so they can point fingers all they want to, but the reality is they're just gouging American consumers."

Schreiber added she hopes the analysis will serve as a wake-up call for Congress to act, and she called on voters to urge their representatives to pass a windfall tax to hold big oil accountable.

She contended it is not reasonable or sustainable for the American people to continue footing the bill for companies' record profits.

"Rather than turning those profits back around to boost production or invest in clean energy, they're just sending it all back to shareholders and stock buybacks," Schreiber stressed. "Truly record-setting amounts of money going back to shareholder and buybacks this year and last year."

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