By Joyce Kryszak
Buffalo, NY – U.S. Senator Charles Schumer wants oil companies to pay up for what he sees as price gouging after last year's hurricanes.
The Exxon Mobil Corporation Monday posted the highest earnings ever recorded for a U.S. company. The oil giant earned nearly $11 billion in its last quarter. That followed the hurricanes that devastated the gulf coast and saw prices at the pumps rise to nearly $4 a gallon locally.
The company's annual profits for 2005 soared to more than $36 billion. High oil and natural gas prices, as well as demand, were credited for the surge. But Senator Schumer says greed was the real cause.
"If there was any proof that the oil companies were in collusion and didn't give us a fair shake, it's the numbers that Exxon Mobil posted today (Monday)," said Schumer. It's record profits. They took advantage of Katrina. They took advantage of all these situations and charged everybody through the nose."
A federal investigation into the dramatic price hikes is under way with a report expected by March. Schumer says he will be sending a letter to the FTC demanding justification for the prices - if there is any. Once the probe is over, Schumer wants companies to have to pay an "excess profits tax" to give some of the money back. Schumer and other lawmakers say that would force oil companies to invest in alternative energy sources.
The Senator says the government also needs to halt mergers that allowed massive consolidations such as Exxon Mobil. He says more competition would help curb soaring gas prices.
The country's other two leading oil companies, Conoco-Phillips and Chevron, also posted dramatic profit increases for 2005. The combined earnings for all three companies was $63 billion.