Democrat John Fetterman scolded the oil industry on Thursday for reaping massive profits and argued companies are rewarding shareholders instead of aggressively investing in new supply.
“Big Oil just made another round of record profits by gouging Americans at the gas pump,” Fetterman, the lieutenant governor of Pennsylvania, said in a statement.
Fetterman, the Democratic candidate for Senate in Pennsylvania, pointed to Shell revealing on Thursday it more than doubled its quarterly profit to $9.5 billion. The UK company promised to plow more money into shareholder rewards, buying back $4 billion of stock and boosting its dividend by 15%.
“Instead of investing that money in American energy production and lowering costs for families, companies are paying themselves through stock buybacks and keeping prices high to line their own pockets,” Fetterman said. “This practice should be severely restricted.”
In response, the American Petroleum Institute, the industry’s biggest trade group, pushed back on Fetterman’s attempt to blame companies for high prices.
“Gasoline prices are determined by market forces – not individual companies - and claims that the price at the pump is anything but a function of supply and demand are false,” API spokesperson Andrea Woods told CNN in a statement.
The oil industry is a notoriously boom-to-bust business. Profits have soared in recent quarters in tandem with prices, allowing the industry to recover some of the severe losses experienced in 2020 when prices went negative.
Yet US oil production has not rebounded nearly as fast as profits, in part because fossil fuel companies are under intense pressure from Wall Street to return cash to shareholders instead of investing in expensive drilling profits.
ExxonMobil raked in $17.9 billion in net income during the second quarter – translating to $2,245.62 every second of every day that quarter. Chevron made $1,462.11 per second. Both Exxon and Chevron are scheduled to release results Friday morning.
“Gas still costs almost $4 a gallon in Pennsylvania. We need lower prices now, and we need to take action,” Fetterman said.
The statewide average for regular gas in Pennsylvania is $3.93 a gallon, up from $3.80 a month ago, according to AAA. Gas prices climbed to a record high of $5.07 a gallon in June.
Fetterman’s campaign called out his opponent’s ties to the oil industry, pointing to campaign donations from oil and gas companies to Dr. Mehmet Oz’s campaign.
“Dr. Oz won’t stand up to special interest lobbyists in Washington because he’s one of them. He has more sympathy for these rich CEOs than he does for the average Pennsylvanian,” Fetterman said.
The Oz campaign did not immediately respond to a request for comment.