The surging price of gasoline means that the 99 percent are giving big oil companies a $5 billion windfall, a Center for American Progress analysis estimates. Oil prices, which averaged a near-record $103 per barrel in 2011, have risen steadily since the beginning of 2012. In tandem with oil prices, gasoline prices are also rising — from an average of $3.30 ending the week of January 2 to $3.59 last week.
Higher gas prices mean that money is flowing out of Americans’ wallets and pocketbooks and straight into the coffers of Big Oil companies. A Center for American Progress analysis finds that each penny rise in the average quarterly (three months) price of a gallon of gas corresponds to a $200 million increase in quarterly profits of the big five oil companies—BP, Chevron, ConocoPhillips, ExxonMobil, and Royal Dutch Shell:
Since the beginning of the year, the price for gasoline increased 29 cents per gallon. If that average increase holds true through the end of March, it will translate to $5.8 billion in additional profits for the big five.
Although those billions of dollars come from the pockets of the 99 percent, the profits stay at the top. The richest 20 percent in this country get half of all market income, with the top one percent getting 21 percent of the profits. With vanishing corporate taxes and a declining share of the gas tax, less and less of the cost of gasoline goes back into societal benefit — like creating jobs by rebuilding our roads and bridges, or investing in energy efficiency and smart growth that reduce our dependence on oil.
Instead of using their outrageous profits to invest in alternative energy sources or create jobs, the big five and other oil and gas firms spent more than $146 million lobbying Congress last year. The big five oil companies alone spent more than $18 million on federal campaign contributions. Ninety percent of these contributions went to Republican candidates and 10 percent to Democrats. Many of these politicians were the loudest defenders of oil tax breaks.