For major oil companies to tell Congressional markets, not corporations, to set the fuel price certification

Gasoline leaks from a nozzle held by a gas station mechanic in Somerville, Massachusetts, US, March 7, 2022. REUTERS/Brian Snyder/File Photo

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WASHINGTON (Reuters) – U.S. oil executives told Congress on Wednesday that they are boosting energy production and no single company is setting the price of gasoline, according to pre-released written testimony, as they defend accusations of lawmakers’ high fuel manipulation. the prices.

Lawmakers on the US House Energy and Commerce Subcommittee on Oversight and Investigations are holding their hearing, scheduled for 10:30 a.m. ET (14:30 GMT), to question companies about why gasoline prices continue to rise despite oil prices. Crude, dipped feedstock for fuel.

US gasoline prices, driven by Russia’s invasion of Ukraine and Western sanctions on Moscow’s energy exports, hit a record before inflation adjustments, on March 11 at $4.33 a gallon and slipped to $4.17 a gallon on Wednesday, according to AAA Automotive Group. down by about 4%.

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Meanwhile, international crude oil prices have fallen more sharply, from a peak of more than $139 a barrel in early March to around $107 on Tuesday, down 23%, and incomplete gasoline futures are down about 15%. (graphic: Gap retail and wholesale)

U.S. Representative Diana Diggett, a Democrat and chair of the subcommittee, said on Twitter about the hearing, in which ExxonMobil executives were (XOM.N)Chevron (XOM.N)BP America (BP.L)Shell USA, Devon Energy Corp. (DVN.N) pioneer (PXD.N) will testify.

“We want to know why these record high prices are and what needs to be done to bring them down immediately,” she said. Many Democrats have complained that oil companies are making record profits while consumers are facing rising prices.

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oil companies would say That labor and supply shortages prevent a rapid return of oil production to pre-pandemic levels, and that prices are set in the international market.

Chevron CEO Mike Wirth will say fuel prices are determined by market dynamics over which companies have little control.

“Changes in crude oil prices don’t always lead to immediate changes at the pump,” says Wirth. “And while the price of crude oil may fall more quickly, competition between retail stations often takes longer to bring prices down again at the pump.”

Democratic President Joe Biden, last week, urged oil companies to increase production and serve American families rather than investors, as he announced a record release of oil from strategic reserves. Read more

Chevron plans to increase capital spending this year by 50%, with about half of that going to increased oil and gas production and the other half going to renewable fuels and low-carbon energy, Wirth says, around previously announced goals.

Exxon, the largest US oil company, said Monday that its first-quarter results could surpass the quarterly record in seven years. The preview provided an indication of what lies ahead in terms of other companies’ profits from oil after the Russian invasion drove up energy prices. Read more

“No single company sets the price of oil or gasoline,” said Darren Woods, Exxon Chairman and CEO, according to the testimony. “The market sets the price based on the available supply and the demand for that supply.”

Gretchen Watkins, president of Shell USA, will say that her company does not control or own 13,000 branded gas stations. “Each of these independent companies is responsible for setting the local retail price of gasoline.”

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Scott Sheffield, CEO of Pioneer, the largest producer in the Permian Basin, will say oil companies cannot turn the taps on quickly due to labor and supply chain shortages, and many rigs and hydraulic fracturing fleets have been shut down when prices were low in 2020.

Gasoline’s retail prices exceed wholesale costs due to refining, transportation, marketing, and taxes, and the gap between the two tends to fluctuate – as retail prices often fall more slowly.
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(Reporting by Timothy Gardner and David Shepherdson in Washington, Liz Hampton in Denver and Sabrina Valley in Houston; Editing by Richard Boleyn and Jonathan Otis

Our criteria: Thomson Reuters Trust Principles.

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