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Gasoline Price Spike Heralds Economy-Busting Christmas ‘Present’ For Oil Companies

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Price for Regular Up 14 Cents Nationally, to $3.01, In One Week; No More ‘Profit Restraint’ for Big Oil, Says Watchdog

Santa Monica, CA — Gasoline prices spiked 14 cents last week, turning the Thanksgiving season into a lucrative early Christmas present for oil companies, said the Foundation for Taxpayer and Consumer Rights (FTCR).

The federal Energy Information Administration recorded a weekly national price average of $3.013 a gallon for regular, up from $2.872 the previous week. California rose from $3.159 to $3.231 during the same week.

“Oil companies are reaping profits of up to $75 a barrel on $95-a-barrel oil, and now they’re taking the leash off of gasoline prices as well,” said Judy Dugan, research director of FTCR and its OilWatchdog project. “With the U.S. economy at a tipping point, a 14-cent jump in gasoline over a single week signals a spike that will empty consumers’ pockets during the holiday season. It’s not hard to imagine $4.00 a gallon early next year.”

FTCR noted that the major oil companies’ third-quarter profit dips were an anomaly, pushed by Congressional threats to cut their subsidies and cap their profits. An unexpected dip in summer gasoline usage, linked to record pump prices, also increased supply and put downward pressure on outlandish refinery profits, said FTCR.

“Now, with energy bills stalled in Congress and excess supply wrung out of the system, oil companies are back on track to profit not just from record crude oil prices, but from newly rising refinery margins,” said Dugan. “At the same time, Big Oil will keep receiving billions of dollars in federal subsidies and faces no threat of rising royalty payments.”

A federal judge in Louisiana last week rejected the government’s attempt suspend federal tax incentives and collect an estimated $60 billion in oil company royalty payments on Gulf of Mexico crude oil. The judge agreed with the oil companies that the government may not suspend tax relief on oil drilled from public waters just because crude oil prices have risen far above the cost of production.

“If the Louisiana judge’s ruling holds up, another possible brake on oil profits, at the expense of taxpayers and motorists, will be removed,” said Dugan. “As the U.S. economy struggles even to keep moving forward, Big Oil’s foot is flat on the accelerator again.”

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FTCR is a leading public interest watchdog. For more information, visit us on the web at www.OilWatchdog.org and www.ConsumerWatchdog.org.

Consumer Watchdog
Consumer Watchdoghttps://consumerwatchdog.org
Providing an effective voice for American consumers in an era when special interests dominate public discourse, government and politics. Non-partisan.

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