New York State Senator John Bonacic Calls For Justice Department Investigation Of Oil Industry Profits

John J. Bonacic

August 31, 2005

New York State Senator John J. Bonacic (R/I/C - Mount Hope) today called upon US Attorney General Alberto Gonzales to investigate why refineries and oil companies in the United States are reaping increased profits ranging from 25% to 58% higher over last year’s earnings.

"With gas prices reaching an all time high, New Yorkers and many American families are finding it increasingly difficult to make ends meet," stated Senator Bonacic. "While it seems there is no relief in sight for the average consumer, municipality, and/or small business, oil companies and refineries are accumulating billions of dollars in profit. Something isn’t right."

Senator Bonacic said a federal probe to determine whether or not there is price gouging by oil companies and refineries is most appropriate and as a result, is urging Attorney General Gonzales to launch a thorough investigation. "The detrimental trickle down effect of over inflated energy prices impacts every sector of our economy. Therefore, I have asked Mr. Gonzales for an immediate Justice Department probe," Senator Bonacic said.

According to an Oil Industry Profits Analysis by the Congressional Research Service dated August of 2005, "high prices for crude oil in 2004 and into 2005 have reduced consumers’ purchasing power and raised costs for businesses while providing billions of dollars to the oil industry and oil exporting countries. The industry’s increased revenues have led to record profit levels."

New York State Senate Majority Leader Joseph Bruno, in a recent newspaper article, cited that oil refineries have seen their profits rise nearly 58% over last year’s profits. "The Majority Leader has rightfully pointed out that this excessive profit level increase is worthy of investigating at the federal level. I couldn’t agree more," stated Senator Bonacic. "In fact, ABC News reports that, ‘As American consumers increasingly feel the pinch at the pump, oil companies have watched their profits soar.’ The same report dated August 11, 2005, cited the most recent profit increases by Exxon, BP, and Conoco Phillips. Their profits rose dramatically, ranging from 38 percent to 56 percent."

In his letter to the Attorney General, Senator Bonacic said, "We have an obligation to ensure the economic health and well being of all aspects of our economy and all American citizens, from consumers to small businesses, large companies, local governments, and taxpayers, not just the oil industry."

"Americans are getting hit hard not only at the gas pump, but also by increased costs of everything from food, clothing, transporation, and doing business to property taxes as a result of exhorbitant energy prices. When our school districts have to pay more for energy, taxpayers will see an added burden. The oil industry and the people involved must be responsible citizens and good neighbors," concluded Senator Bonacic.

# # #