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Record Gas Prices for Consumers Means Record Profits

July 28, 2000

Record Gas Prices for Consumers Means Record Profits
for Oil Companies

Consumers Pay Highest Gasoline Prices Ever in Second Quarter

WASHINGTON, D.C. When consumers were paying sky-high gasoline prices this past spring, many of the world’s major private oil companies were reaping record profits, a Public Citizen study shows.

Exxon Mobil led the pack with record second quarter profits of $4.15 billion, which were 123 percent higher than the same quarter last year. Chevron was next with quarterly profits of $1.14 billion, a 136 percent increase from last year, followed by Texaco with $641 million in profits, a 124 percent increase over 1999 s second quarter. Conoco’s haul of $460 million was a 205 percent increase from 1999’s second quarter.

The study examined the revenues and profits of seven major oil companies, as reported by the companies in their quarterly earnings statements for April through June. The other companies Public Citizen examined were Marathon, which enjoyed a 208 percent profit increase, and Coastal, which saw a 37 percent increase. (The second quarter results for five more major oil companies won t be released until early August).

Oil companies are also experiencing an increase over the profits of the first quarter of 2000. Marathon’s 2nd quarter earnings were 84 percent higher than its 1st quarter, Philips 76 percent higher, and Exxon Mobil’s were 24 percent higher. These increases in profit came at a time when gas prices were extremely high.

“The oil companies try to blame OPEC for high gasoline prices, but their record profits show that they are the ones taking money from the pockets of American consumers,” Public Citizen President Joan Claybrook said. “They cannot continue to blame others for the high price of gas and claim that they aren’t culpable in this huge consumer rip-off.”

Gasoline prices hit all-time highs on June 19, with a national average price of $1.68 a gallon, almost 56 cents higher than a year ago, according to the Energy Information Administration, a branch of the U.S. Department of Energy. Gasoline prices now stand at an average of $1.52 a gallon.

Gasoline prices had been rising sharply since January in response to lowered production of crude oil by major producers and increased demand by consumers. The U.S. Federal Trade Commission is investigating whether oil companies colluded to raise prices.

The report also shows that the Republican congressional candidates have received $759,000 in PAC contributions from oil companies during the 1999-2000 election cycle, while Democrats have received $210,000. The Republican Party has received $1.4 million in “soft money” contributions from oil companies; the Democratic Party, $609,000, according to data compiled by the Center for Responsive Politics.

Republican presidential candidate George W. Bush received $1.46 million in oil company money during the 1999-2000 election cycle, while Democratic candidate Al Gore has received $95,000. Reform Party candidate Pat Buchanan has received $7,600 from oil companies. Public Citizen founder and Green Party candidate Ralph Nader is not taking any PAC or soft money from oil companies or any other corporations.

“Unfortunately, oil interests use money to influence lawmakers to enact energy policies — such as tax breaks and research subsidies — that are favorable to big oil companies but lousy for consumers,” said Wenonah Hauter, director of Public Citizen’s Critical Mass Energy and Environment Program.