Democrat John Fetterman chided the oil industry on Thursday for reaping huge profits and argued that companies are rewarding shareholders instead of aggressively investing in new supply.
“Big Oil just made another record profit by driving Americans to the gas pump,” Pennsylvania Lt. Gov. Fetterman said in a statement.
Fetterman, a Democratic candidate for the Pennsylvania Senate, said Shell on Thursday doubled its quarterly profit to $9.5 billion. The UK company pledged to pour more money into shareholder rewards, buying back $4 trillion of shares and increasing its dividend by 15%.
“Instead of investing that money in America’s energy production and reducing costs for families, companies are paying for it through stock buybacks and keeping prices high to line their own pockets,” Fetterman said. “This practice should be very limited.”
In response, the American Petroleum Institute, the industry’s largest trade group, pushed back on Fetterman’s attempt to blame the companies for high prices.
“Gasoline prices are determined by market forces — not individual companies — and claims that pump price is a function of supply and demand are false,” API spokeswoman Andrea Woods said in a statement to CNN.
The oil industry is a boom-and-bust business. Profits have risen along with prices in recent quarters, allowing the industry to recoup some of the severe losses it suffered in 2020 when prices turned negative.
However, U.S. oil production has not rebounded as quickly as profits, in part because fossil fuel companies are under intense pressure from Wall Street to return cash to shareholders rather than invest in expensive drilling profits.
ExxonMobil earned $17.9 billion in the second quarter, translating into $2,245.62 in every second of every day of that quarter. Chevron earned $1,462.11 per second. Exxon and Chevron will release results Friday morning.
“Gas is almost $4 a gallon in Pennsylvania. We need lower prices now, and we need to take action,” Fetterman said.
Pennsylvania’s regular gas average is $3.93 a gallon, up from $3.80 a month ago, according to AAA. Gas prices rose to a high of $5.07 a gallon in June.
Fetterman’s campaign pointed to his opponent’s ties to the oil industry, citing donations from oil and gas companies to Dr. Mehmet Oz’s campaign.
“Dr. Oz won’t stand up to Washington’s special interest lobbyists because he’s one of them. He has more sympathy for those CEOs than the average Pennsylvanian,” Fetterman said.
The Oz campaign did not immediately respond to a request for comment.