Robbery at the Gas Pump!

May 5, 2011

Price-gouging by the big oil monopolies is breaking the budgets of millions of working people.

On May 2, the U.S. Department of Energy reported that the average price of a gallon of gas in the U.S. was $3.96. Many families with 2 wage-earners are spending over $100/week just to get to work. Small businesses are passing the increased price of gas to consumers. Many public school districts are being forced to spend millions of dollars to buy gas for buses. Many families are suffering as a result of the heavy burden of winter heating bills.

The exorbitant prices for gas and oil are not due to any shortages. Exploration for oil and gas as well as the development of refinery capacity and other processes needed to deliver the product are carried out over long periods and the amount of gas available at any given time is not dependent on momentary fluctuations.

The real problem is price-gouging by the big oil capitalists. For example, from 1999 to 2004, the oil refineries nearly doubled their profits on gasoline from 22.6 cents/gallon to 40.8 cents. Between 2001-2005, the top five oil companies in the U.S. grabbed nearly $280 billion in profits. (See testimony of Tyson Slocum of Public Citizen before Senate Committee, February 2006). With additional price increases this year, Exxon Mobil grabbed $7.5 billion in profits in the 3 months of January, February, and March (up 69% over the same period last year); Shell grabbed $6.3 billion (up 30% over the same period last year); Chevron grabbed $6.2 billion (up 36%); Conoco Phillips grabbed $3 billion (up 43%), etc. Yet even these profits were not enough and during April the companies raised prices nearly 10%.

The root problem is that a handful of giant companies dominate all facets of the oil and gas industry – exploration, production, refining, transportation, retail sales, etc. For example, just 10 companies (including ExxonMobil, Chevron, ConocoPhillips, BP and Shell) control 83% of our country's refinery capacity. These giant capitalists use their monopoly position to extort ever-higher prices out of the American people.

The American people will continue to pay ransom for such necessities as heat and transportation until we challenge and restrict the power of the monopolies.

Oil and gas are natural resources which, by right, belong to the people of our country. The oil and gas industries have been created through public investment and the collective labor of the country. These resources must be put in service of the people.

As a first step, the availability and cost of such necessities as gas and heating oil cannot be left to the arbitrary ups and downs of the market or the price-gouging of the capitalist monopolies.

The government must take control over oil and gas pricing and distribution, regulating production in order to guarantee the availability of these commodities at the lowest possible price.

To fundamentally solve the problem, the oil and gas industries must be taken out of the hands of the capitalists and returned to the public. These industries must be run on the basis of meeting the needs of the people and protecting the environment, not as a means of maximizing profits for the capitalists.