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U.S. Department of Energy (DOE) Secretary Jennifer Granholm addressed the nation's oil and energy companies in a statement issued late last month, challenging them to reduce prices for Americans instead of pocketing record profits.
The statement, released by the DOE on Sept. 30, was a reply to a letter from an unnamed energy company that earned "nearly $200M in profit every single day last quarter," according to the statement. The company's letter, Granholm states, "misreads the moment we are in."
"The fact is this: Energy companies are making record profits, with refiners and retailers also posting margins that are well above average — while passing the costs on to consumers," Granholm says in the statement. Granholm stated the average markup for fuel from wholesale to retail is currently $1.27, up from the typical 90 cents for the time of year. She said the "price dynamic" is due to the failure of companies to keep sufficient regional inventories to meet demand when refineries are offline, "while those same companies export gasoline and diesel at record levels."
Granholm noted that although fuel prices in many areas are lower than the peak in June, other regions are seeing prices rise because inventories were allowed to fall below customer demand.
“This is a time for American energy companies to take action to lower prices for consumers," Granholm said, "and to rebuild inventories of gasoline and diesel in this country that are below the five-year range."
Granholm said companies such as ExxonMobile think free-market incentives are the best way to address pricing problems, "they need to step up and show results for American consumers and the American economy."
“As the President has said, these companies need to focus less on taking every last dollar off the table, and more on passing through savings to their customers," Granholm said.