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Big oil companies had record profits while consumers paid higher gas prices

With US inflation at a 40-year high, driven largely by rising gas and fuel prices, petroleum industry behemoths broke their own records last quarter and posted historically high profits, according to the latest earnings reports.

Drive to News: Oil drilling titans Chevron, ExxonMobil, Shell and BP all released their latest quarterly earnings reports in the past few days, and most of them hit new, all-time profit records for the second quarter of 2022.

The big gains came as consumer gas prices rose to historic highs in June as Russia’s invasion of Ukraine and sweeping sanctions roiled global oil markets. Soaring fuel prices have challenged family budgets across the country, not only forcing tough decisions about vacations and daily driving habits but also driving up the cost of groceries and most consumer and manufactured goods, thanks to ever-higher-than-ever pricey delivery costs.

The latest Consumer Price Index report pegged June inflation at 9.1%, the largest year-over-year increase since 1981.

US consumers are now paying 10.4% more than last year for groceries, nearly 60% more gas than in 2021, and shelter costs, which are up 5.6% from June 2021.

Mountain West states, which include Utah, continued to have the highest regional inflation in the country with average prices of goods and services rising 9.9% in June, up from 9.4% in May. As a group, western states have seen the highest gas prices in the country, thanks in part to the region’s lack of oil industry infrastructure.

Big Oil, Big Money: While COVID-19 restrictions have pummeled the oil industry, as leisure and business travel has halted and remote work assignments have undermined commuters’ fuel consumption, demand has driven US oil consumption to pre-pandemic levels and beyond.

And that consumption, combined with record pump prices, drove astronomical profits for oil companies.

Some of the recent reported gains in April-June include:

British Petroleum, $8.45 billion.

Chevron, $11.62 billion.

Exxon, $17.85 billion.

Shell, $11.5 billion.

Even as his company broke its own profit record for the first quarter of 2022, Shell CEO Ben Van Beurden recognized the effects of higher prices on consumers in the US and around the world.

“It was a turbulent quarter for the world and the global economy,” Van Beurden said. “The war in Ukraine continued, destroying lives and disrupting food and energy supplies, and worsening the lives of many more through high energy prices and a cost-of-living crisis.”

Customers transporting gas can: New survey data reveals that higher gas prices are having significant effects on US consumers when it comes to their driving behavior and travel decisions. AAA reports that nearly two-thirds, 64%, of US adults have changed their driving habits or lifestyle since March, with 23% making “major changes.” The top three changes drivers make to compensate for higher gas prices, according to the survey, are driving less, combining errands and cutting back on shopping or dining out.

“We know that more American drivers have made significant changes in their driving habits to cope with higher gas prices,” AAA spokesman Andrew Gross said in a statement Monday.

Mark Wolff, executive director of the National Energy Assistance Directors Association, said higher gas and energy prices will hit low-income families and front-line workers the hardest.

“It’s devastating,” Wolff told The Associated Press. “You live on a tight budget and it’s an extra $40 to $50 a week.”

Wolff wants the federal government to tax energy companies and “redistribute some of those profits to struggling families.”

Contribution: Associated Press

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