On Wednesday, various Democrats in the House launched serious accusations against oil companies executives, specifically that they are deliberately “ripping off the American people” by allegedly prioritizing profits before production.
According to Democrat Representative Frank Pallone, “Big Oil” is apparently “refusing to increase production to provide the American people some much needed relief at the gas pump.”
Pallone’s remarks demonstrate a disconnect with economic reality, especially in terms of immediate, short-term relief. Not only is increased production a capital investment, which could naturally put further pressure on prices, but it also takes time, which means that short-term relief would not be achieved, even if drilling were to commence immediately.
Furthermore, American oil executives also reminded Democrats that they do not unilaterally control a global oil market, which means that they do not have the power to dictate the price of crude oil.
“We do not control the market price of crude oil or natural gas, nor of refined products like gasoline and diesel fuel” Chevron CEO Mike Wirth remarked in exasperation, adding the the company has “no tolerance for price gouging.”
The grilling of oil executives emerges as Biden demands the release of an additional 1 million barrels of oil per day from the strategic oil reserve over the next six months, chiefly in a bid to keep energy prices under control.
According to the AAA, average gas prices are $4.16 per gallon on Wednesday, a dramatic increase from $2.87 a year ago.
The Biden administration has repeatedly blamed Putin and American companies for the sky high gasoline prices, despite the fact that gasoline prices began increasing within days of Biden assuming office.
CEOs were also pressed on whether or not they would suspend dividends to shareholders in an effort to lower gas prices, and they indicated that they have no intentions of depriving their investors of dividends.
For many Americans, in particular retired Americans, dividends represent a valuable source of income.
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