It’s that time of the year – the oil company CEO-grilling time.
As driving season heats up, a congressional committee has summoned oil executives and the media are laying the blame for gas prices again.
On ABC’s April 1 “Good Morning America,” which headlined one of its segments “April Fuel’s Day,” Chris Cuomo questioned why oil companies aren’t taxed more while they’re posting higher profits.
“Congress is calling all the oil companies on the carpet today,” Cuomo said. “Lawmakers want to know why big oil needs billions in tax breaks while posting record profits of $123 billion. Consumers want answers too. Gas now runs $3.29 a gallon, up three cents from last week and 58 percent higher than last year. Oil executives argue they need tax breaks to expand production.”
Of course, network news rarely reports how much those companies are already paying in taxes. For example, Exxon paid $105 billion in taxes in 2007, more than two-and-a-half times as much as it made in profit, the Business & Media Institute recently reported.
And higher costs in the form of more taxes for oil companies are not likely to make the price of gas down, according to The Heritage Foundation’s Ben Lieberman. When this same issue came up in 2006, Lieberman explained punishing oil companies with the tax code is not going to help consumers.
“Many in Congress are looking to provide Americans with relief at the gas pump, but raising taxes on the oil industry is not the way to do it,” Lieberman wrote. “The track record for punitive measures like the windfall profits tax shows that they usually harm consumers along with the targeted industry.”
The April 1 CBS “Early Show” also went after oil companies, questioning why they’re “raking in huge profits.”
“If gas prices seem painfully high right now, you’re absolutely right. They just hit a new record,” CBS correspondent Chip Reid said. “It’s no wonder drivers are angry. The price of gas is burning holes in their pockets. According to AAA, the average price of unleaded regular has hit a new high, just under $3.29 a gallon. Only a year ago it was $2.67 a gallon. That’s up 25 percent, an annual increase that AAA calls staggering. And it comes at a time when oil companies are raking in huge profits.”
Fuel taxes, however, also hit consumers in the wallet. Drivers in California pay more than 45 cents per gallon in state taxes, in addition to the federal 18-cent tax. With those taxes taken out of the national average, it would be $2.66.
The reports came on the same day oil company executives are set to testify before the House Select Committee on Energy Independence and Global Warming – the committee set up by Speaker Nancy Pelosi (D-Calif.) that has no legislative authority.
“ExxonMobil (NYSE:XOM) made a record $40.7 billion last year alone,” Reid said. “Later today, top executives of the five biggest oil companies – ExxonMobil, Chevron (NYSE:CVX), ConocoPhillips (NYSE:COP), Shell (LON:RDSA) and BP [British Petroleum] (LON:BP), are expected to get an earful from hostile members of Congress. Some, led by Democratic chairman Ed Markey, have already made clear they believe consumers are being ripped off.”
NBC’s April 1 “Today” wasn’t sympathetic toward the oil companies either – saying the companies got “big tax breaks.”
“Oil company executives will be in the hot seat on Capitol Hill as Congress holds a hearing on big tax breaks for big oil,” NBC’s Ann Curry said. “Top five oil companies earned record prices because of soaring oil and gas prices.”
In Cuomo’s report, he referred to the rising cost of diesel fuel and its impact on the trucking industry.
“Many truck drivers frustrated by soaring diesel prices are protesting today by parking trucks or slowing down,” Cuomo said. “Diesel prices now top $4 a gallon.”
The “Good Morning America” report came one day after Democratic presidential hopeful Sen. Hillary Clinton railed against oil companies on the campaign trail in Pennsylvania at a truckers’ protest.
“Oil companies are making so much money now,” Clinton said. “And part of it is, we’re subsidizing them.”
According to the April 1 Morning Call (Allentown, Pa.), after meeting with truckers protesting the higher fuel prices in Harrisburg, Pa., Clinton said she would take the $55 billion in tax breaks now given to oil and drug companies and Wall Street “and give it back to you.” She has said in the past she wanted to “take” oil companies’ profits.
However, one of the main things the truckers were protesting was the high tax on diesel fuel.
“As truckers called upon state and federal lawmakers to eliminate the taxes on diesel fuel, Democratic presidential candidates campaigning in the area offered plans to wean the country off foreign oil,” Mike Wereschagin, Brad Bumsted and Salena Zito wrote in the April 1 Pittsburgh Tribune-Review.
Amy Menefee contributed to this report.
