Democratic Senators Call for DOJ Probe into Alleged Industry Collusion
A group of nearly two-dozen Democratic senators, led by Senate Majority Leader Chuck Schumer, have called on the Department of Justice (DOJ) to investigate allegations of price-fixing in the oil and gas industry. They argue that collusion among oil and gas firms has led to higher fuel prices, exacerbating inflation pressures in the U.S. economy.
According to the senators, industry collusion may have resulted in a significant decline in domestic crude production growth rate, costing the average U.S. household up to $500 per car in increased yearly fuel costs. They describe this as an “unwelcome tax” that particularly burdens lower-income families.
The senators also reference the recent Exxon-Pioneer merger, which the Federal Trade Commission (FTC) alleges led to evidence that U.S. oil executives worked with the Organization of the Petroleum Exporting Countries (OPEC) to artificially boost oil prices. The FTC had approved the merger on the condition that certain restrictions were placed on former Pioneer president and CEO Scott Sheffield’s involvement with ExxonMobil.
Congressional Democrats argue that these alleged offenses enrich corporations and force consumers to pay more at the pump. They call on the DOJ to protect consumers, small businesses, and the public from petroleum-market collusion and demand that the industry redress any threats to competition and harm to consumers if found guilty of illegal conduct.
In response to the allegations, Scott Sheffield asserts that the federal agency has unjustly smeared him and warns that vilifying business leaders could have a chilling effect on their ability to advocate for their industries.
The White House, while refusing to comment on the letter specifically, emphasizes President Biden’s stance against illegal collusion between corporations and its negative impact on hardworking families.
This call for a DOJ probe comes as ConocoPhillips agrees to acquire Marathon Oil in a $22.5 billion deal.
Targeting the Oil and Gas Sector
The current administration and leading Democrats have been critical of the oil and gas sector in recent years, accusing companies of taking advantage of geopolitical crises and persistent inflation to gouge consumers.
In September 2022, President Biden warned oil and gas industry executives against using rising fuel prices as an excuse to raise gasoline prices or gouge the American people. He later compared energy firms to war profiteers and threatened to implement a windfall tax.
Since January 2021, U.S. crude oil prices have climbed about 53 percent to around $80 a barrel, while gasoline costs have surged roughly 49 percent to $3.57 per gallon.
Other Democrats have urged the DOJ to investigate the oil industry for its alleged decades-long disinformation campaign, drawing parallels to the actions of the tobacco industry. The American Petroleum Institute (API) pushes back against these claims, stating that petroleum prices are determined by market forces rather than individual companies.
The current administration argues that corporate greed has contributed to elevated inflation, leading to the launch of a joint FTC-DOJ task force to investigate unfair and illegal pricing across various sectors.
Government data shows that inflation progress in Washington has stalled, with the annual consumer price index remaining above 3 percent in the first four months of 2024.
