Executives of major oil and gas companies will be called “in the coming weeks” to testify before Congress about gasoline and oil prices and to answer questions about potential price gouging, the top Senate Democrat said.
Speaking from the Senate floor Wednesday, Majority Leader Charles E. Schumer, D-N.Y., said Congress will call on CEOs from major oil and gas companies to answer questions about the recent increase in oil and gasoline prices.
“The CEOs of large oil and gas companies should be advised they’ll have to provide answers before the Senate very soon,” Schumer said, placing emphasis on corporate stock buybacks the industry has executed in recent months.
Oil prices rose in late February after Russia invaded Ukraine and as OPEC nations like Saudi Arabia held production steady.
Inflation and gas prices are shaping up as prominent topics for the midterm elections in November, and some Democrats in Congress want to suspend the federal gas tax in the face of higher gas costs while members of both parties are pushing domestic oil companies to increase production.
Sen. Mark Kelly, D-Ariz., at a Feb. 17 hearing, pressed an executive of Shell at a hearing to ramp up production. But experts at that hearing said more production from the U.S. petroleum industry may not lower pump prices, given a short supply of workers, supply chain disruptions, swirling COVID-19 variants and demands from investors who want more certain financial returns.
It was not clear which executives Schumer wants call to testify or when a hearing or hearings would occur. Spokespeople for the senator did not immediately respond to requests for comment.
Schumer took issue with what he described as possible “price gouging.”
“Over the past few weeks, as war in Ukraine began, the price of a barrel of oil rose precipitously,” Schumer said. “That immediately translated to oil and gas companies raising the price for Americans at the pump. But something is happening that Americans shouldn’t overlook,” he said. “Over the past few days, oil prices have actually been decreasing but the price of gas at the pump has not.”
'Bit of a lag'
One industry group said in response to Schumer's comments that gas prices often take to fall with the price of oil.
"Crude oil is the biggest contributor to the price of finished gasoline and there's always a bit of a lag for gasoline prices to catch up when crude oil prices fall," the American Fuel and Petrochemical Manufacturers, which represents refining companies, said in a statement. "It takes time for gasoline to move from refineries to terminals and retail outlets."
A spokesman for the American Petroleum Institute would not provide a comment for the record.
Oil prices hit more than $120 a barrel in early March and gas prices in the U.S. rose too, hitting about $4.33 per gallon on average on March 11, according to AAA.
Global and U.S. prices for oil are now trading at about $90 per barrel range, but the cost of gasoline, an average of $4.305 on Wednesday, according to the AAA, has been slower to taper.
Schumer said, “The bewildering incongruity between falling oil prices and rising gas prices smacks of price gouging and is deeply damaging to working Americans. The Senate is going to get answers.”