WASHINGTON : Oil companies are again the target of US public and
political anger over their record profits as prices at the gasoline
pump go sky-high.
The political pressure has got so hot in the nation's capital, that
US President George W. Bush on Tuesday ordered a probe into the
potential manipulation of gasoline prices at fuel stations.
Meanwhile, opposition Democrats are seeking to capitalize on the
price spikes ahead of November congressional elections.
"There's nothing wrong with corporate profits, and I'm all for
Americans having retirement security, but does anyone think it is
fair to have consumers pay 100 dollars a week to fill their fuel
tanks, while the Big Energy bosses fill their bank tanks with
hundreds of millions of dollars?" Senate Democratic minority leader
Harry Reid asked Monday.
He was alluding to a 400-million-dollar compensation package
pocketed by former ExxonMobil CEO Lee Raymond when he
retired.
That was a drop in the bucket compared to the 36 billion dollars in
net earnings that the number one oil giant reaped in 2005.
Consumers are stunned by prices at the gasoline (petrol) pump that
have topped three dollars a gallon (3.8 liters) in some US states.
While those are not record highs once adjusted for inflation, many
Americans are feeling the pinch.
Since he is seen as close to the oil industry -- he worked in the
industry as did his father -- Republican President George W. Bush
cannot stand idly by and let the opposition Democrats lead the
attack on the issue of prices at the pump.
Aside from the gasoline pricing probe, Bush also Tuesday suspended
deposits into the US strategic oil reserves.
"Taxpayers don't need to be paying for certain of these expenses on
behalf of the energy companies," Bush said referring to what he
called "unnecessary tax breaks like the writeoffs of certain
geological and geophysical expenditures, or use of taxpayers' money
to subsidize energy companies research into deep water
drilling."
Oil executives were called to testify before Congress after
gasoline prices soared on the heels of Hurricane Katrina last year.
They blamed damage to pipelines and refining infrastructure in the
region, and an imbalance in supply and demand worldwide.
Dave O'Reilly, CEO of number two US oil company Chevron, also
reminded senators that public national oil and gas companies
control most of global output and not private firms.
"We are dwarfed in size by national oil companies such as Saudi
Aramco and Russia's Gazprom," he noted.
US consumer groups charge that megamergers have reduced competition
in the United States, making competition less of an issue.
The Foundation for Taxpayer and Consumer Rights in a recent report
on California prices -- among the country's highest -- said the
link between crude prices and the price of gasoline at the pump was
questionable.
"Oil companies are opportunistically using the rising world price
for crude oil as an excuse to excessively raise gasoline prices and
pump up their profits, even though the spot market price for crude
has gone up far more slowly than gasoline prices," said FTCR
President Jamie Court.
"In addition, the spot price is higher than most oil companies pay,
since they either harvest their own crude or pay more stable and
often much lower contract prices," Court said.
- AFP
