June 19, 2011 (San Diego) – Congresswoman Susan Davis (D-San Diego), whose district may soon extend to include La Mesa, part of El Cajon and other areas in East County with reapportionment, has joined several other legislators in sending a letter asking Attorney General Eric Holder to conduct an investigation into oil speculation. The legislators seek to “determine whether illegal practices may be artificially inflating oil and gas prices” and also ask for “common sense limits" on the trading of oil futures.
“It's infuriating that major oil companies continue to profit from tax exemptions while American families struggle with rising gas prices," Davis said in a letter to constituents. "I joined in sending a letter to Vice President Biden asking him to make sure that cutting unnecessary tax subsidies for major oil companies is part of a deal to reduce the deficit.”
CNN reports that the world’s six biggest publicly traded oil companies reported a combined $38.1 billion in profits during the first quarter of this year. According to CNN, “the windfall stems from a surge in the price of oil, which jumped 16% in the first quarter.”
Democrats argue that in an era of painful budget cuts, it’s wrong to provide subsidies to an industry pocketing billions of dollars in profits.
Republicans have opposed removing the subsidies, arguing that oil companies would merely pass costs along to consumers in the form of higher gas prices and that eliminating subsidies could cost jobs.