What's going on with gas prices? Prices have jumped over 50 cents per gallon in Minnesota in just two months, and Chief Economist for the American Petroleum Institute John Felmy explains why.
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The API held a press conference on Tuesday saying that more crude oil production and efficient consumption of oil products are key to addressing higher gasoline prices.
According to API, the average U.S. retail price for regular gasoline was $3.78 as of last week.
Many oil and gas experts urging consumers to expect "all-time record highs during the upcoming driving season," even as domestic output numbers rise.
In December, domestic output grew by a record 766,000 barrels a day, to the highest level in 15 years according to government data. That puts the nation on pace to surpass Saudi Arabia as the world's largest producer by 2020. So, if we are producing more oil domestically, why are gas prices are record highs?
A lot of people at home see oil companies making record profits. Numbers like a quarterly profit of $16 billion for Exxon last year, the highest profit ever recorded by a U.S. corporation.
In fact, the big five oil companies combined made a record-high $137 billion in profits in 2011, up 75 percent from 2010, and they made more than $1 trillion in profits from 2001 through 2011.
Yet, instead of giving savings to drivers through lower gas prices or investing in more jobs, those five companies used $38 billion, or 28 percent of annual net income, to repurchase their own stocks. They are also sitting on nearly $60 billion in cash. How does this help consumers or the oil industry in upping production?
A House Natural Resources Committee report in 2010 showed that despite generating $546 billion in profits between 2005 and 2010, four major gas companies -- ExxonMobil, Chevron, Shell, and BP -- reduced their U.S. workforce by 11,200 employees over that time.