The jaw-dropping size of Big Oil’s latest quarterly profits – nearly $31B combined by Exxon Mobil and Chevron – has revived calls from politicians and consumer groups to impose more taxes on the companies or restrict gasoline exports.
Exxon Mobil (NYSE:XOM), Chevron (CVX), Shell (SHEL) and TotalEnergies (TTE) are paying nearly $100B to shareholders annually in the form of buybacks and dividends while reinvesting just $80B in their core businesses this year, according to Bloomberg.
President Biden and others have scolded oil companies for their high earnings and accused them of gouging motorists, and the president singled out Exxon after Friday’s quarterly earnings release for rewarding investors instead of cutting fuel prices.
“Can’t believe I have to say this, but giving profits to shareholders is not the same as bringing prices down for American families,” Biden tweeted in response to Exxon’s latest dividend increase.
The president assailed Exxon again Friday night, saying “Those excess profits are going back to their shareholders and their executives instead of going to lower prices at the pump and giving relief to the American people, who deserve it and need it.”
Senate Majority Leader Chuck Schumer called the earnings “unconscionable,” and a California congressman seeking a way to lower prices at the pump introduced legislation Friday that would ban gasoline exports whenever the domestic price over the prior seven days averages at least $3.12/gal, which was the average price in 2019.
Executives at Exxon and Chevron, finally producing strong results after years of poor returns, appear to be in no mood to back down.
Exxon CEO Darren Woods devoted two pages of prepared remarks during the company’s earnings conference call detailing why the European Union’s windfall taxes on the energy industry will raise energy prices for consumers in the long run.
Chevron CFO Pierre Breber warned Friday that “taxing production will just reduce it… If you raise costs on energy producers, it will decrease investment so that goes against the intent of increasing supplies and making energy more affordable.”
But Shell CEO Ben Van Beurden said the energy industry should “embrace” the “societal reality” that it will face higher taxes to help struggling parts of society.