This week executives from several major oil companies will appear before a U.S. Senate committee to answer questions about their industry's record profits. VOA's Jim Bertel reports momentum is building in Congress to enact a windfall tax on oil industry profits to help poor Americans pay their escalating heating bills.
As the price of oil spiked to new highs in the United States this year, oil companies were reaping record profits. Many consumers in the United States are fed up.
"Lower the prices, please. If you could, take it easy on us," says one consumer.
“I think it's wrong, definitely,” says another. “But still your hands are tied. What are you going to do? We have to get gas."
For the third quarter of this year, Exxon Mobil posted a profit of nearly $10 billion. Royal Dutch / Shell earned over $9 billion while Chevron made $3.5 billion in profit. Critics, including consumer advocate Anna Aurilio, blame corporate greed.
"What we're seeing is oil companies profiting from unfortunate events like Hurricane Katrina and laughing all the way to the bank," she says.
With the attacks mounting, the oil companies are fighting back, suggesting their profits are "not out of step" with other industries. They also point to the disruptions in the supply of oil from Hurricanes Katrina and Rita, which drove the price of crude oil to over $70 a barrel as a primary reason for the record profits.
Rayola Dougher, with the American Petroleum Institute, says, "These profits are there because of the relative scarcity, overnight scarcity, of the products and the continued demand by consumers for them. And that's what set the price and that's why it went up."
Even with the price at the pump down significantly from a month ago, consumers are angry and members of both major parties in Congress want answers. A Senate committee will investigate accusations of price gouging by the oil companies. There is also growing support for a "windfall tax" on oil industry profits. The money would then be used to help poor Americans pay their heating bills.
But oil company executives defend their profits as necessary. Bob Lenzner, a senior editor at the business magazine Forbes, agrees.
"A lot of money is going to be plowed back into looking for more oil and natural gas in places where it costs a lot of money."
The Bush administration opposes any new taxes on the oil industry and instead would like to see an expansion of offshore drilling and the establishment of emergency national reserves of gasoline and natural gas.