New Research Shows Oil and Gas Companies Price Gouge Consumers After Record-Smashing Year
March 17, 2022 Groundwork Collaborative
Yesterday, President Biden called on oil companies to lower prices at the pump, warning that “oil and gas companies shouldn’t pad their profits at the expense of hardworking Americans.” His tweet supports new findings showing that soaring gas prices for families have been a windfall for energy companies, CEOs, and investors. Groundwork Collaborative’s Executive Director Lindsay Owens gave the following statement:
“Every disruption to energy markets has proven to be another opportunity for CEOs to pad their profits – and the crisis in Ukraine is no exception. Despite the falling cost of crude, energy companies have made clear that Americans shouldn’t expect relief at the pump any time soon. The profits are simply too good.
“The only thing more lucrative than inflation profiteering is war profiteering. And now, we are experiencing both.”
Email email@example.com to speak to Groundwork’s team of inflation experts about the link between higher gas prices and price gouging.
The 24 top oil and gas companies raked in over $174 billion in profits last year, the highest increase in profits in seven years, and the seven supermajors gave back $38 billion to investors in stock buybacks. Here’s what they had to say on the latest round of corporate earnings calls:
- Exxon Mobil’s CFO told investors: “At $60 real Brent prices over the six-year plan period through 2027, we expect to generate over $100 billion in excess cash… and we expect to have sustained excess cash flow and increasing shareholder distributions.”
- Pioneer Natural Resources, a Texas shale company, chose to limit production to line the pockets of Wall Street investors, despite the recent spike in prices around the war in Ukraine. As their CEO stated, “We think it’s important to return cash back to the shareholders.”
- Chevron told investors that “the last two quarters have been the best two quarters the company has ever seen. And last year was 25% higher than the best year in our history. So we increased the dividend.” Investors rewarded the company for its performance – Chevron reached its highest stock price ever in January 2022.
- Marathon’s CEO boasted “Our cash flow-driven return of capital framework uniquely prioritizes our shareholders as the first call on cash flow generation, not the drill bit.” Marathon, the U.S.’s largest oil refiner, would rather make money fattening up Wall Street than sell to consumers.
- Valero plans to use profits and high gas prices to send more money to Wall Street. Their CFO said, “…with the margin increase in the fourth quarter (of 2021) and they’re continuing to be strong during the first quarter so far, if this pattern of recovery does continue, we do anticipate we’ll be doing buybacks this year…” Valero profits hit $1.01 billion in Q4 of 2021, smashing Wall Street expectations through higher consumer demand.