Big Oil for telling congressional markets, not companies, setting fuel prices – testimony

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

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WASHINGTON, April 5 (Reuters) – U.S. oil executives will tell Congress on Wednesday that they are increasing energy production and that no company is fixing the price of gasoline, according to a pre-released written testimony, as they defend lawmakers’ accusations of high-fuel erosion. prices.

Legislators in the U.S. House Energy and Commerce Subcommittee on Oversight and Investigations are holding the hearing, scheduled for 10:30 a.m. (14:30 GMT), to grill companies about why gasoline prices remain high, even though crude oil, crude oil prices, decreased.

US gasoline prices, driven by Russia’s invasion of Ukraine and Western sanctions against Moscow’s energy exports, broke records before inflation adjustments on March 11 at $ 4.33 per liter. gallon and fell to $ 4.17 per gallon. gallon Wednesday, according to the AAA motorist group. a decrease of about 4 per cent.

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International crude oil prices, meanwhile, have fallen more, far more steeply, from a peak of more than $ 139 per tonne. barrel in early March to around $ 107 on Tuesday, down 23%.

“We will not sit back and allow the fossil fuel industry to take advantage of the American people and lower them at the pump,” Diana DeGette, a Democrat and chair of the subcommittee, said at the hearing, where exxon Mobil (XOM) executives .N), Chevron (XOM.N), BP America (BP.L), Shell USA, Devon Energy Corp (DVN.N) and Pioneer (PXD.N) will testify.

“We want to know what is causing these record high prices and what needs to be done to get them down right away,” she said. Many Democrats have complained that oil companies have made record profits while consumers are facing high prices.

The oil companies will say that labor shortages and supply prevent a rapid return of oil production to pre-pandemic levels and that prices are determined in the international market.

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

“Changes in the price of crude oil do not always result in immediate changes at the pump,” Wirth would say. “And while crude oil prices may fall faster, it often takes more time for competition between retail stations to bring prices back at the pump.”

Last week, President Joe Biden, a Democrat, called on oil companies to increase production and service American families instead of investors, when 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 increase oil and gas production, and the other half going to renewable fuels and lower carbon energy, Wirth would say, on previously announced targets.

Exxon, the leading U.S. oil company, said Monday that their first-quarter results could top a seven-year quarterly record. The preview gave a signal of what lies ahead for other companies’ oil earnings, after Russia’s invasion pushed up energy prices. Read more

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

Gretchen Watkins, president of Shell USA, will say that her company neither controls nor owns the 13,000 gas stations that carry its brand. “Each of these independent companies is responsible for setting the local retail price of petrol.”

Scott Sheffield, CEO of Pioneer, the top producer in the Perm Basin, says oil companies cannot open taps quickly due to shortages of workers and supply chains and the closure of many rigs and hydraulic fracture fleets when prices were low in 2020 .

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Reporting by Timothy Gardner, David Shepardson in Washington, Liz Hampton in Denver and Sabrina Valle in Houston; editing by Richard Pullin

Our standards: Thomson Reuters Trust Principles.

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