In the first quarter, Exxon has earned almost $11 billion in profits. High oil prices have increased the company’s profits 69 percent from last year. Higher oil prices mean high gas prices at the pump, and therefore higher revenue for oil companies such as Exxon. The average price of gas is $3.89 per gallon across the nation. The price of oil is at $113 a barrel currently.
Other oil companies are doing quite well this quarter also. Shell reported $8.78 billion–up 60 percent from last year. BP‘s profits are at $7.2 billion—16 percent from a year ago. Chevron Corp., the second-biggest U.S. oil company, will report $5.69 billion. This is a 25 percent increase for Chevron from a year ago.
Ken Cohen, vice president of public and government affairs for Exxon Mobile Corp., said they do not control the price of oil but end up getting blamed for the price of gas anyway. He states Exxon will receive “the inevitable headlines and sound bites about high gasoline prices and what to do about them.” Argus Research analyst Phil Weiss says, “They really don’t have a lot of control” over the price of gasoline. But then they get these high profits and people get upset. That’s what politicians respond to.”
Exxon has been focusing on natural gas as of late. The company expects natural gas to be the second most important fuel source within the next decade. Their natural gas output rose 24 percent this quarter as natural gas prices dropped 16 percent from last year.
In order to help decrease gas prices, President Obama plans to cut into some of those high profit earnings by eliminating $4 billion in taxpayer subsidies for oil companies.