Leaders Question Gasoline Prices
Saturday, April 22, 2006
Congressional leaders yesterday planned to ask President Bush to order investigations into possible price gouging by oil companies as crude oil prices hit new highs on world markets and average gasoline prices in the nation's capital blew through the $3-a-gallon mark.
House Speaker J. Dennis Hastert (R-Ill.) and Senate Majority Leader Bill Frist (R-Tenn.) are preparing to send a letter to the president Monday asking him to direct the Federal Trade Commission and Justice Department to investigate alleged price gouging and instruct the Environmental Protection Agency to issue waivers that might make it easier for oil refiners to produce adequate gasoline supplies, Hastert spokesman Ron Bonjean said.
Hastert and Frist's letter comes amid charges by some consumer groups and Democrats that oil companies have manipulated refineries and oil inventories to drive up prices. Hastert also took aim at the rich pay package for Exxon Mobil Corp.'s retired chief executive, which he called "unconscionable."
Yesterday, oil prices climbed to a new record, unadjusted for inflation, with benchmark crude rising $1.48 to settle at $75.17 a barrel on the New York Mercantile Exchange. Average gasoline prices in the District reached $3.02 a gallon, up 3 cents from the day before.
AAA Mid-Atlantic moved to discourage panic. "We caution drivers against hoarding or panic-buying. If one gas station is out, the next one will have fuel," said John B. Townsend II, AAA Mid-Atlantic's manager of public and government affairs.
Democrats have been criticizing the administration as well as the oil companies for failing to take action to dampen the surge in prices, which have risen more than 40 cents a gallon in the Washington area in the past month. Bush has an opportunity to address the issue Tuesday, when he appears at a meeting organized by the pro-ethanol Renewable Fuels Association.
As pump prices rise, they threaten to cramp consumer spending. "High energy prices -- including prices at the pump -- act like a tax on the American economy," Treasury Secretary John W. Snow said yesterday as finance ministers from around the world gathered in Washington for meetings of the World Bank and the International Monetary Fund.
A House GOP leadership aide said that Hastert also responded to calls for hearings into the pay package for Lee Raymond, who retired as Exxon Mobil's chief executive in January. According to a recent proxy filing by the company, Raymond received $48.5 million in salary, bonuses and incentive payments last year; exercised more than $20 million in stock options in 2005; and in January received a lump-sum retirement payment of $98.5 million. The proxy said that after 43 years of service, Raymond had accumulated $183 million of stock holdings plus stock options worth a net of about $69 million at current share prices.
"The speaker is very concerned about compensation packages given to executives like Raymond at a time when families are facing choices between putting food on the table and filling their car with gasoline," Bonjean said. "We met with Exxon Mobil and several companies last fall, and it seems that the message hasn't gotten through."
Exxon had said that Raymond's package was in keeping with his performance as chief executive over the past 12 years, when the company's earnings soared to record levels.
"Having a profit is good. We believe in that as Republicans," Bonjean said. "But when you're making this kind of money and American families are being affected, there should be appropriate things done to bring prices down. We're going to be asking them again: What are they doing with their enormous profits?"
That's what a lot of consumers were wondering, too, as they lined up for gasoline. Gene Munson of Arlington was washing the windshield yesterday while filling up his compact station wagon. On the pump, the numbers in the cents column were spinning with the speed of a slot machine. Every pump at the Sunoco station in the 5000 block of Lee Highway in Arlington was occupied. Three or four cars were waiting for a spot.