Oil company executives will be hot on the heels of a House subcommittee hearing on Wednesday as U.S. consumers across the country are accused of raising petrol prices at bumps where drivers paid a gallon more for fuel last month.
The rise in petrol prices came amid rising crude oil prices CLK22.
To an extent not present in nearly 14 years. But market experts say there is a reasonable explanation for the rise, even though consumers sometimes charge higher prices for fuel.
“The main reason for the rise in retail petrol prices in March was Russia’s invasion of Ukraine against the tight global oil market,” said Brian Milne, editor-in-chief of DTN. “With the invasion of Ukraine and the raising of concerns over sanctions, supply disruptions and deficits on Russian oil exports, oil demand has quickly recovered from epidemic locks, surpassing supply growth.”
This is a bit of a consolation for US drivers who paid an average of $ 4,353 a gallon for petrol on March 11, according to GasBuddy data.
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On Wednesday, the Democratic-run House Energy and Commerce Committee’s oversight and subcommittee on oversight plans to include executives from major oil companies, including the Chevron Corporation CVX.
ExxonMobil Corp. XOM,
And BP PLC BP,
Testify at a hearing entitled “Tortured at the Gas Station: America’s Pain at Big Oil and Pump”.
The inquiry comes as politicians and consumers point out that many oil companies have made huge profits amid rising oil prices. BP has been recording its highest profit since 2012.
With calls for profit-holiday taxes or rising energy prices in the US and Europe, Exxon said in a filing late on Monday that its first-quarter profit would be over $ 9 billion, up from $ 8.8 billion. In the fourth quarter.
This was partly thanks to $ 1.9 billion in crude price changes to $ 2.3 billion, and $ 400 million in gas price changes, Exxon filed. This will be offset by the thin margins of chemicals, deficiencies related to leaving Russia after the start of the invasion, and more.
Exxon is expected to report later this month, and FactSet calls for a $ 2.17 earnings per share adjustment, compared to the EPS 65 cents adjusted for the quarter a year earlier.
Other major energy companies have yet to offer first-quarter updates, which is somewhat unusual in the tight script world of integrated giants.
People look at oil company profits and think they are “raising” [gasoline] Patrick de Hahn, head of petroleum analysis at GasBuddy, said prices were arbitrary, but did not see the “biggest” losses for those companies by 2020.
Raising gas prices is not a “fair assessment” of the market, he said. Oil companies, of course, do better when oil prices are high, but there is more of a “voice of frustration” about rising oil prices.
Before fuel prices generally begin to move in the direction of a major oil-price change within two to four days of what is known as an “ups and downs decline” in oil prices, there are also some ‘facts’: rocket’ and ‘feather’ prices, ‘prices’ rocket “May take, and then slowly decrease.
But petrol stations are aware that the market is very volatile, the last thing they want to do is significantly reduce their price to 10 or 15 cents a gall, and the wholesale price will only rise by 20 cents, he said.
According to the Energy Information Administration, by 2021, the price of crude oil will be about 54% of the average retail price for petrol. Thus, a nearly 60% increase in U.S. oil prices until April 1, the same time a year ago, would cause a spike in petrol prices at the pump. GasBuddy data shows that petrol averaged $ 4,175 on April 4, 46% higher than it was a year ago.
But it will not turn into a big profit from the sale of petrol to the oil companies. In a recent report, Jeff Leonard, vice president of strategic business ventures at the National Association of Convenience Stores or NACS, said only about 39% of the nation’s 145,000 gas stations carry branded fuel from one of the five major oil companies. Only 0.1% of U.S. gas stations are actually owned by a major oil company.
After a gallon of gas markup averages 30 cents, and costs like credit card fees, retailers “make a net profit of about 10 cents a gallon,” Lenard said.
American drivers consume about 9 million barrels of gasoline a day. If it multiplies 365 days a year and 42 gallons a barrel, retail net profit of about 10 percent adds up to $ 14 billion a year from gasoline sales in the country – to all 145,000 fuel retailers, Lenard said. .
“The claims about inflation in the petrol supply chain are despicable and seeks to sacrifice an industry under extraordinary regulatory oversight to divert attention from inflationary pressures that are detrimental to US consumers,” Milne told DTN.
Claudia Aziz in San Francisco contributed to this story.