Since Monday, the national average for a gallon of regular gasoline fell by three cents to $4.15 but many Americans are still struggling with soaring inflation caused by greedy corporate insiders.
The Labor Department said that consumer prices in December were up 7.9 percent from a year ago — the biggest hit to family pocketbooks in about 40 years.
“We can’t overlook the role that concentrated corporate power has played in creating the conditions for price gouging,” said Sen. Elizabeth Warren, D-Mass., hitting back on economists who say inflation is being driven by a surge in demand, supply-chain bottlenecks, and the war in Europe.
According to new data from the Energy Information Administration (EIA), total domestic gasoline stocks decreased by 2 million barrels to 236.8 million barrels last week.
Gasoline demand increased slightly from 8.5 million barrels per day to 8.56 million barrels per day. Although supply and demand factors would have typically supported elevated pump prices, the fluctuating price of oil continues to be the main factor influencing pump prices.
Pump prices will likely face downward pressure if oil prices remain below $100 per barrel.
At the close of Wednesday’s formal trading session, WTI dropped by $5.73 to settle at $96.23. Crude prices decreased after EIA’s weekly report revealed that total domestic crude stocks increased last week by 2.5 million barrels to 412.4 million barrels, approximately 17 percent lower than the beginning of April 2021.
Additionally, crude prices faced more downward pressure this week after the International Energy Agency’s (IEA) 31 member countries, including Mexico, Japan, Germany, and Canada, announced plans to release 120 million barrels of crude oil from their emergency oil stockpiles.
The amount includes a previously announced 60 million barrels of oil from the U.S. It would be the second coordinated release in just over a month in response to spiking oil prices after Russia invaded Ukraine.
While the IEA said more details about the release would become available soon, including the release timeline, the announcement has helped ease some supply concerns, pushing crude prices lower.
The Labor Department reported the 12-month increase has been steadily rising and is now the largest since the period ending January 1982.
The all items less food and energy index rose 6.4 percent, the largest 12-month change since the period ending August 1982. The ‘food at home’ index rose 8.6 percent over the last 12 months, the largest 12-month increase since the period ending April 1981.
The energy index rose 25.6 percent over the last year, and the food index increased 7.9 percent, the largest 12-month increase since the period ending July 1981.
Democratic pollster Margie Omero says the idea that corporate greed is at fault resonates with people who are feeling the pinch of pricey gas and groceries.
“People are approaching this not as economists, but what they’re observing,” Omero said. “A lot of voters feel that companies and the wealthy are getting wealthier while other folks are struggling and having a harder time keeping up.”
Economist Isabella Weber of the University of Massachusetts, Amherst, argues the pandemic has created opportunities for some companies to pad their bottom line — not just covering higher costs but expanding their profit margins as well.
“It’s a little bit like the guy who sells water at $20 a bottle after a hurricane, which is only possible because everybody wants to buy water but the local supply is fixed,” said Weber.
What the corporate apologists tend to miss is that despite whatever rising costs exist for raw materials or transportation or other underlying factors, the incontestable truth is profits are way up for the largest corporations in America.
Since 2015, U.S. oil giants ConocoPhillips, Chevron, Devon Energy, Exxon Mobil, and Hess have paid out “$200 billion to shareholders in dividends and stock buybacks.” That’s more than double the amount they have paid to the US and foreign governments in taxes.
In 2021, while Americans were struggling to pay gas bills and other basic necessities, fossil fuel CEOs were celebrating their biggest profit increases in at least seven years.
“We have more cash than we know what to do with,” Murray Auchincloss, BP Chief Financial Officer told investors.
On a recent earnings call, Shell told stockholders, “Our adjusted earnings were some $19 billion for the year.”
“We expect to generate over $100 billion in excess cash,” Exxon Mobil CFO Kathy Mikells said during an investor presentation in March.
“By the end of 2021, we had one of our most successful years ever,” said Chevron executives boasting about making record profits. “Full-year earnings were over $15 billion, the highest since 2014.”
While prices at the pump appear to be taking a step back, those oil companies are probably just hoping to temper consumer anger to make buyers adjust to higher costs.