Despite the severe budget cuts facing many middle-class programs, the five biggest oil companies continue to rake in tens of billions of dollars in profits, while still receiving unnecessary and wasteful tax breaks.
Middle-class families have gotten some relief at the pump this spring due to declining gasoline prices. AAA reported that U.S. drivers paid an average of $3.55 per gallon of gasoline in April, the least expensive average for this month since 2010. Gasoline prices are now almost 35 cents lower than they were one year ago, when gasoline cost an average of $3.89 per gallon.
Despite lower prices at the pump, the biggest publicly traded oil companies in the world have raked in billions of dollars in profit over the past three months. According to their earnings reports released today, the big five oil companies—BP, Chevron, ConocoPhillips, ExxonMobil, and Shell — earned a combined $30.2 billion during the first quarter of 2013, or $331 million per day. Cumulatively, Big Oil profits were 6 percent lower than the first quarter of 2012 due to lower gasoline and oil prices, but these companies still earned a combined $229,832 every minute from January through March. This is more than what 95 percent of American households earn in an entire year.
Nearly one-third of these profits were used to repurchase companies’ stock, which only serves to pad the pockets of senior executives and the largest shareholders. The big five oil companies are also sitting on $82 billion in cash reserves, according to reports from the Securities and Exchange Commission for each company. While making these huge profits, BP and Exxon are the culprits in ongoing major oil disasters that are affecting the Gulf Coast and Arkansas.
Big Oil behaving badly again
Daniel J. Weiss is a Senior Fellow and the Director of Climate Strategy at the Center for American Progress. Jackie Weidman is a Special Assistant to the Energy team at the Center. Thanks to Jessica Goad, Manager of Research and Outreach for the Public Lands Program at the Center for American Progress.