The Senate Reports Oil and Gas Prices Are Not Impacted by Corporate Greed
The Senate Reports Oil and Gas Prices Are Not Impacted by Corporate Greed – These Experts Say Otherwise
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A new report by the Joint Economic Committee Republicans contends that gas prices — which have increased exponentially over the past few months and are a major contributing factor to the four-decade high inflation — are due to supply and demand imbalances, with the Russia-Ukraine war playing a minimal part.
The report also argues that there is no price gouging by oil and gas companies.
However, some experts disagree with the premise, saying that gas and oil companies are using market disruptions, caused by the pandemic recovery and the Russian invasion of Ukraine, to raise prices above competitive levels.
“These claims are not supported by the evidence,” ranking member Sen. Mike Lee wrote in the July 26 report.
The report finds that the price per gallon of gasoline increased from $2.34 in January 2021 to a peak of $5.11 in June 2022, the highest level on record and that prices remain elevated at more than $4.50 per gallon in July.
“We estimate that the Russian invasion of Ukraine explains 30% of the increase in gasoline prices from January 2021 through June 2022. The remaining 70% of the increase is due to pre-existing price trends arising from suppressed supply of oil production and surging demand,” reads the report.
“There is no evidence of oil and gas firms engaging in collusion or price gouging to raise prices during the current crisis. U.S. oil and gas producers, refiners, and retailers operate in competitive markets that preclude this possibility,” it continued.
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