Exxon posts record profits in midst of turmoil over gas prices
ExxonMobil Corp. released its first-quarter profit figures Thursday. The results will only add fuel to the fire for calls to end subsidies to oil companies and investigate price gouging as costs at the pump continue to rise.
According to the U.S. Energy Information Administration, the national average for a gallon of gasoline this week is $3.789.
The company’s first-quarter net income increased 69 percent to $10.7 billion. That’s up from $6.3 billion one year ago. This first-quarter increase is also the biggest the company has seen in eight years. From selling oil and natural gas, Exxon’s profit increased 49 percent to $8.7 billion.
Ken Cohen, vice president of public and government affairs, sought to temper reactions to the company’s profit figures Wednesday before the release.
“Here’s a simple fact of economics that’s getting everyone in Washington pretty excited this week: When prices increase for a commodity like oil, companies that produce and sell that commodity earn more money,” wrote Cohen on the company’s “Perspectives” blog.
“These facts probably won’t make anyone feel better about paying more for gasoline – and of course price increases can have a very real impact on family budgets – but I do think it’s important that we at least have an honest discussion about what’s behind recent energy price increases,” he added.
Cohen went on to point out that “Oil is a commodity; prices are set in the global market, ExxonMobil doesn’t set oil prices, ExxonMobil is one of the largest taxpayers in the United States, and less than 3 percent of ExxonMobil’s earnings are form U.S. gasoline sales.”
None of those arguments, however, will likely quell criticism from the White House and other lawmakers.
Earlier this week, President Obama sent a letter to Congressional leaders urging them to act on ending tax breaks and subsidies for oil companies.
“I am writing to urge you to take immediate action to eliminate unwarranted tax breaks for the oil and gas industry, and to use those dollars to invest in clean energy to reduce our dependence on foreign oil,” wrote Obama in a letter to Speaker of the House John Boehner, House Minority Leader Nancy Pelosi, Senate Majority Leader Harry Reid and Senate Minority Leader Mitch McConnell.
Obama continued pushing the gas prices issue Wednesday night at a DNC event in New York when he said, “We’ve got a lot more work to do to have an energy policy that works. We’re going to have to keep on making those investments. And by the way, we can afford them.”
“You know, for $4 billion, we could do an awful lot,” Obama added. “And you know where we could get $4 billion is by ending taxpayer subsidies we give to oil companies and gas companies…They’re making enough profit.”