As gas prices in Connecticut hit $5 a gallon, Sen. Blumenthal targets oil companies’ billion-dollar profits

By Ted Glanzer
Hartford Courant – Jun 06, 2022

Gasoline prices in Connecticut continue to skyrocket, with the average cost in the state surging to $4.89 per gallon, up from $4.65 a week ago and $4.20 a month ago, according to AAA.

The statewide surge is in line with national and global trends.

No one has been spared from pain at the pump, including U.S. Sen. Richard Blumenthal, who said during a press conference Monday that he paid $4.83 per gallon in Hartford that morning and $5.07 per gallon in a different part of the state over the weekend.

“I’m angry,” he said, “just as every driver in the state is.”

Blumenthal, while standing across the street from a gas station in Hartford, noted gasoline prices have soared this year due to increased demand as the U.S. attempts to shake off the COVID-19 pandemic as well as Russia’s invasion of Ukraine, which has upended global markets.

But Blumenthal also cited oil companies price gouging as another reason for high gasoline prices.

“The big oil companies are profiteering,” Blumenthal said. “They are making record profits causing consumers unprecedented pain.”

During the first quarter of this year, according to Blumenthal, the five top oil companies — Chevron, ExxonMobil, BP, Shell and ConocoPhillips — reported profits 300% higher, or about $35 billion, than the first quarter of last year.

“Those additional profits are solely out of consumers’ pockets,” Blumenthal said, noting that the alleged price gouging isn’t the only cause for why consumers are paying record prices at the pump, but a substantive reason.

Blumenthal said he is proposing a “big oil windfall profits tax” so at least 50% of those profits reported by the five major oil companies revert back to consumers in the form of a rebate.

“Money back in consumers’ pockets out of the excess, unconscionable profiteering of the big oil companies,” he said.

Blumenthal noted that big oil companies aren’t using their record profits to invest in new ways to produce more oil to lower the price at the pumps, but instead are engaging in stock buyback programs and paying out dividends to shareholders, or are paying massive bonuses to their executives.

“The buybacks are benefiting shareholders, but not consumers,” Blumenthal said, adding that in addition to stock buybacks and executive bonuses, those companies are also cutting jobs. “Those buybacks help the people who own the companies, but not consumers.”

Consumers would see rebates of at least $300, if not higher, with the big oil tax, Blumenthal said.

Blumenthal also proposed a price gouging prevention act, empowering the president to declare a national emergency and enable the Federal Trade Commission to investigate and sue major oil and gas companies.

The measure would give the FTC the authority to investigate whether companies are taking advantage of an international crisis to boost profits, Blumenthal said. If it were to find a company engaging in price gouging, the FTC could impose civil penalties equal to the profits the company made as a result of the gouging, Blumenthal said.

The FTC could also impose criminal penalties of $500 million or $10 million as a civil penalty per month.

“These kinds of penalties would be hard-hitting and powerful,” Blumenthal said.

Finally, Blumenthal is calling for the suspension of the 18.4-cent-per-gallon federal gasoline tax to ease the burden on consumers. In March, Gov. Ned Lamont signed legislation suspending the state’s 25-cent gasoline tax from April 1 to Dec. 1.

“Consumers deserve relief and they deserve it now,” Blumenthal said. “There are steps we can take. I call on my colleagues on the other side of the aisle to join in this effort.”

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