As crude oil prices fall but gas prices remain high, progressive lawmakers are calling for accountability for “profiteering” fossil fuel companies, pointing out the deterministic power that such corporations hold over the country.
Over roughly the past week, crude oil prices have been dropping after they spiked in response to Russia’s invasion of Ukraine. Crude oil prices are now closer to what they were before the invasion began. Meanwhile, although prices at the pump soared as crude oil prices increased, they have stayed high even as crude oil prices have fallen; according to AAA, prices may still continue rising, though they seem to be plateauing for now at around $4.30 per gallon on average.
Lawmakers say that the reason prices at the pump have remained high is because companies are taking advantage of the crisis in Ukraine and the pandemic. As Big Oil’s profits have climbed, dropping crude oil prices have only highlighted the oil industry’s greed and price gouging, progressives argue.
“Big oil CEOs need to be held accountable for profiteering, this can’t stand,” said Rep. Ilhan Omar (D-Minnesota) in response to crude oil prices dropping on Monday.
Oil companies are “profiteering,” wrote Rep. Alexandria Ocasio-Cortez (D-New York). “And there should be consequences for it.”
— David Dayen (@ddayen) March 15, 2022
Ocasio-Cortez further expressed frustration that right wingers and self-proclaimed capitalists are complaining about gas prices while seemingly misunderstanding that it is capitalism that has brought gas prices to where they are.
“Many folks run around claiming to be ‘free-market’ capitalists, but what they actually are is captured market capitalists, using subsidies and restrictive policy to hold us hostage to fossil fuels, for-profit healthcare/housing, etc. that many wouldn’t choose if they had the choice,” Ocasio-Cortez wrote on Monday.
“If you think gas is expensive now, imagine if we actually had to pay the true price without” the billions of dollars that the U.S. spends on fossil fuel subsidies, Ocasio-Cortez continued. “If fossil fuel companies didn’t have such tipped scales for them it’s very likely we’d be much further along with cheaper alternatives.” The same price-gouging methods go for prescription drug prices and housing, the lawmaker said.
Democrats have been seeking legislative solutions to current gas prices. Last week, Rep. Ro Khanna (D-California) and Sen. Sheldon Whitehouse (D-Rhode Island) introduced legislation to tax oil and gas companies’ windfall profits as oil prices reach record highs.
The legislation would place a tax on the difference between current barrel prices and average pre-pandemic prices, disincentivizing oil companies from keeping prices high in order to pad their profits and please big investors. Revenue from that tax would be redistributed to the public, phasing out for people who make $75,000 in income yearly.
“Why is the price of oil LOWER today than it was in 2014 while the average price for a gallon of gas nationwide is 80 cents a gallon HIGHER than it was eight years ago? Answer: Corporate greed,” wrote Sen. Bernie Sanders (I-Vermont) on Tuesday. “Now is no time for profiteering. Now is the time for a windfall profits tax.”
Oil companies have come under scrutiny over the past year as customers have had to pay more at the pump while profits for companies like Exxon and Chevron have soared. Although corporations have been blaming inflation for high prices, a report last year found that in the first nine months of 2021, the top 24 oil and gas companies made $174 billion in profits while shelling out $44 billion for stock buybacks and dividends.
Experts say that part of the reason why gas prices are so high is because oil companies are drilling less, restricting supplies in order to raise prices. “This is the moment the oil and gas industry has been waiting for,” Clark Williams-Derry, energy analyst at the Institute for Energy Economics and Financial Analysis, told Earther. “They don’t want to spoil the dividend party. They’re finally generating the cash their investors have expected them to do all along.”