Sign up now for FREE unlimited access to Reuters.com Register LOS ANGELES, June 10 (Reuters) – US President Joe Biden on Friday accused the US oil industry and in particular Exxon Mobil Corp (XOM.N) of capitalizing on a lack of supply to boost profits after a report showed that Inflation jumps to new 40-year high. US consumer inflation accelerated in May as gasoline prices soared and food costs soared, leading to the largest annual increase in four decades. A gallon of regular gasoline cost an average of $ 4.99 nationwide on Friday, according to the AAA Motor Group. Biden, who took office pledging to reduce US dependence on fossil fuels, said on Friday he hoped to accelerate oil production, which is expected to reach record highs in the United States next year. Sign up now for FREE unlimited access to Reuters.com Register But it also issued a warning to industry, whose profits have skyrocketed with oil and gas prices, citing profits as proof that consumers are paying for more than higher labor and shipping costs. “Exxon made more money than God this year,” Biden told reporters after speaking to union representatives in the port of Los Angeles. US oil companies are not using higher profits to drill more, but to buy shares, he added. Acquisitions of shares improve earnings per share by reducing the number of shares outstanding, indirectly contributing to the strengthening of stock prices. Companies see acquisitions as a way to reward investors. “Why not drill? Because they make more money without producing more oil,” Biden said. “Exxon, start investing and start paying your taxes.” Exxon refuted the comments, noting that it continued to increase oil, gasoline and diesel production in the US and had borrowed heavily to increase production while it had losses in 2020. “We are in regular contact with management, informing them of our planned investments to increase production and expand refining capacity in the United States,” said spokesman Casey Norton. Exxon will increase its spending by 50% on shale farms in West Texas, he said, where he expects to add 25% more production this year after adding 190,000 barrels to oil production last year. An ongoing expansion of the Texas refinery will add the equivalent of a “new medium-sized refinery,” Norton said. Exxon, the largest U.S. oil producer, lost about $ 20 billion in 2020 and borrowed more than $ 30 billion to finance operations. It paid $ 40.6 billion in taxes last year, $ 17.8 billion more than in 2020, he said. The president spoke during a visit to the port of Los Angeles, where he defended his financial history and job creation and denied responsibility for inflation, which rose 8.6% year-on-year until May, according to new report of the Ministry of Labor. At a Democrat campaign rally in Beverly Hills that night, Biden was cautious about future inflation prospects: “We will live with that inflation for a while,” he said. “It will fall gradually, but we will live with it for a while.” Biden had previously criticized the US oil, gas and refining industries for using “the provocation created by the war in Ukraine as a pretext to make things worse for high-paying families or rising prices.” Exxon recorded its biggest quarterly profit in seven years when it announced fourth-quarter earnings in February. After halting share acquisitions several years ago, it resumed them this year and pledged to spend up to $ 30 billion by next year. Many companies have stated that they are holding back costs that could boost oil production to lower prices of $ 100 a barrel because that is what investors are demanding. read more Rising costs have become a political headache for the Biden government, which has tried various measures to reduce prices. These include a record release of barrels from US strategic reserves, waivers of rules related to summer gasoline production, and support for major OPEC countries to boost production. Biden, in a statement Friday, urged Congress to pass legislation to reduce the cost of energy, prescription drugs and shipping. Shipping companies made profits of $ 190 billion, a sevenfold increase in one year, Biden told the port. The situation made him so “organically angry” that he wanted to “burst”, he said. Sign up now for FREE unlimited access to Reuters.com Register Report by David Gaffen in New York, Kanishka Singh in Washington. editing by Heather Timmons, John Stonestreet, Richard Chang and Kim Coghill Our role models: The Thomson Reuters Trust Principles.
