Schumer Releases New Survey Of Orange County Gas Prices Proposes Excess Oil Company Profits Go To Victims Of Katrina
Hurricane-Related Gas Price Gouging Escalating Costs in Orange County, With No Decisive Action, Could Continue For Months Senator Also Announces Gouge Watch Where Citizens Can report Dramatic Increases and Huge Fluctuation in Gas Prices to Website Linked to FTC
In light of high gas prices in Orange County, U.S. Senator Charles E. Schumer today called for temporary windfall profit levy on oil companies. Schumer released a survey that shows the range of gas prices throughout Orange County, and expressed serious concern that people could be profiting in the wake of the devastation caused by recent hurricanes. Schumers bill would impose a levy on big oil windfall profits and get revenue to victims of Hurricanes Katrina and Rita relief efforts, forcing companies to share some of the burden with taxpayers.
Once we started to finally understand the breadth of the tragedy of Katrina, Rita came our way, Schumer said. Now, big oil is reaping enormous, excessive profits from consumers who already feel like they need to beg and borrow just to fill up their tank. A windfall profit levy on big oil that produces revenue that will go exclusively to hurricane relief will share the burden and save taxpayer billions of dollars.
Schumer released a survey of gas prices throughout Orange County. The survey, which was done this week, showed prices as high as $2.99 per gallon. According to AAA, New York gas prices are up 44% since last year. New York State has the high gas prices throughout the country, except for Hawaii and Washington, DC. Though some of the increase in gas prices can be attributed to the interruption in oil and refined gas supplies, and the uncertainties of such an unprecedented and unpredictable event as Hurricane Katrina, Schumer expressed fear that some of the fluctuation and inconsistencies in gas prices are a result of price gouging at the pump.
The major oil companies are reaping $7 billion a month in windfall profits resulting from the enormous surge in oil prices, which have gone up over $30 dollars a barrel in since 2004. Experts say the biggest oil companies stand to make $80 billion in windfall profits in the next year.
This year, Exxon Mobil, the world's largest publicly traded oil company saw a 2nd quarter profit increase of 32%. Royal Dutch Shell PLC, the world's thirdlargest publicly traded oil company had a secondquarter profit increase of 34 percent, to $5.24 billion. BP PLC, the secondlargest, had a second quarter profit that rose 29 percent, to $5.59 billion. ConocoPhillips, the thirdlargest U.S. oil company saw profit for that quarter rise 51 percent, to $3.14 billion
Oil companies who are making excessive profits because of Katrina and perhaps Rita should, at the very least, shoulder a fair share of the burden with the taxpayers. Schumer said
Schumer announced his proposal today, which was introduced as the REPAIR Act, Recapture Excess Profits and Invest in Relief (S. 1809). The Senator's proposal would impose a 50% excise levy on oil company windfall profits. His plan would put the revenue directly into a Hurricane Rita relief fund that would save taxpayers hundreds of millions of dollars. Schumer today also unveiled his new "Gouge Watch" where he asked New Yorkers to report all dramatic increases and large fluctuations in gas prices to his webpage that will link their complaints to the FTC. Since complaints of possible gas gouging have not abated Schumer is setting up his website to receive complaints and then send them directly to the Federal Trade Commission. The website is now available at www.schumer.senate.gov.
Across the Northeast, gas prices have surged from preKatrina levels. Market forces have certainly played a role in these prices, but the variety of prices at gas stations and the fact that profits continue to flow to big oil indicate improper pricing. There are currently no federal laws that specifically address price gouging. The state laws that do exist regarding price gouging are usually only triggered in situations arising from a declared emergency.
Last month, in an effort to crackdown on any possible price gouging, Schumer called on the Federal Trade Commission to launch a toptobottom investigation to make sure that oil companies and gas station owners and the pipeline in between them are operating ethically and within the law. Though the Federal Trade Commission already monitors gas prices and investigates possible antitrust violations in the petroleum industry, Schumer called for the immediate formation of a task force to promptly identify the many cases of price gouging being reported across the country, and asked that the task force formulate a process by which price gougers are swiftly prosecuted.
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