US democrats call for probe into 'Big Oil' price fixing

US Democrats call for criminal probe into Big Oil price-fixing

/ 08:04 AM May 31, 2024

WASHINGTON, United States — Senate Majority Leader Chuck Schumer and nearly two dozen Democrats called on the Justice Department Thursday to investigate the oil and gas industry over allegations of price-fixing.

The senators pointed to an investigation by US antitrust authorities into a high-profile merger that concluded there was evidence of anticompetitive practice by oil executives to boost fuel costs for Americans.

“These reports are alarming and lend credence to the fear that corporate avarice is keeping prices artificially high,” Democrats wrote in a letter to Attorney General Merrick Garland.

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Schumer and his colleagues urged Garland to “use every tool” to prevent and prosecute price-fixing, which they said may have increased gasoline, diesel, heating oil, and jet fuel costs “in a way that has materially harmed virtually every American household and business.”

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The letter came with Democrats escalating a confrontation with so-called “Big Oil” over high prices and greenhouse gas emissions as the presidential election looms in November.

The Federal Trade Commission earlier in May approved ExxonMobil’s $60 billion acquisition of leading Texas oil producer Pioneer Natural Resources — but accused Pioneer CEO Scott Sheffield of colluding with the OPEC+ group of countries to boost prices.

READ: US antitrust regulators probe ExxonMobil’s $60-B Pioneer deal

Regulators pointed to multiple private conversations and hundreds of text messages between Sheffield and OPEC officials in which the CEO discussed pricing and production and assured them that Pioneer was working to keep supply low.

Cost to consumers

Schumer and his colleagues argued that industry collusion may have contributed to sharply lowering US oil production, boosting gas prices by 94 cents a gallon since the pandemic hit.

“That means Pioneer’s and its co-conspirators’ collusion may have cost the average American household up to $500 per car in increased annual fuel costs — an unwelcome tax that is particularly burdensome for lower-income families,” they said.

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The FTC banned Sheffield from serving on Exxon’s board following the takeover but the senators said that “only the DOJ can prosecute and fully redress the alleged anticompetitive behavior in the oil sector.”

Price fixing findings can carry penalties of up to $1 million and 10 years in prison for individuals and $100 million for companies.

Sheffield says the FTC mischaracterized the facts and evidence to “publicly and unjustifiably” vilify him.

“Its case is built on a false narrative about these statements and a farfetched interpretation of the applicable statutes,” his lawyers wrote in a federal filing earlier this week.

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Pioneer said the FTC’s complaint reflected a “fundamental misunderstanding of the US and global oil markets” and that Sheffield was motivated by strengthening the position of domestic energy producers to enhance US energy security.

TAGS: 'Big Oil', probe

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