Oil Profits Soar With Pump Prices

Exxon Profits Up, As Congress Tries To Tackle Election-Year Spike

(CBS/AP)  Amid consumer outcry in the U.S. about soaring gasoline prices, Exxon Mobil Corp., the world's largest oil company, said Thursday that higher oil prices drove first-quarter profits up 7 percent from the prior year. Net income rose to $8.4 billion, or $1.37 per share, for the January-March period from $7.86 billion, or $1.22 per share, a year ago.

Exxon Mobil said its earnings came in below its record fourth-quarter because all three of its business – exploration and production; refining; chemicals – didn't perform as well.

Exxon's earnings follow ConocoPhillips's announcement Wednesday that its earnings rose 13 percent to $3.29 billion in the first quarter. Chevron is expected to announce Close to $4 billion in profits on Friday.

The average retail price of gasoline in the U.S. is now $2.91 a gallon, or 68 cents higher than a year ago. Reports of the oil companies' profits come as Washington lawmakers are looking to appease consumers with various proposals to make big oil companies pay more taxes or provide consumers with some other relief.

Senate Republicans advocate sending $100 rebate checks to millions of taxpayers, and a Democrat is leading the campaign for a 60-day gasoline tax holiday.

A vote is possible as early as this week on the Senate GOP approach, which calls for $100 rebate checks for taxpayers to cushion the impact of higher gasoline prices. The measure seems unlikely to prevail, at least initially, since it includes a highly controversial proposal to open a portion of Alaska's Arctic National Wildlife Refuge to oil drilling.

Senate Republicans also favor extending a tax break that manufacturers receive for each hybrid vehicle they make, and want President Bush to suspend deliveries to the nation's strategic petroleum reserve for six months.

Democrats seemed caught off guard by the GOP maneuvering, but a spokesman said they would have a plan of their own.

Sen. Bob Menendez, D-N.J., has proposed a 60-day suspension in the federal tax on gasoline and diesel, a holiday that he says would cut the cost of gasoline by more than 18 cents a gallon and reduce the price of diesel fuel by more than 24 cents a gallon.

The Senate Finance Committee provided additional evidence of the lawmakers' scramble to respond. In an unusual move, the panel requested tax returns from the country's major oil and gas companies, CBS News correspondent Bianca Solorzano reports, as part of an investigation into industry profits and soaring gasoline costs.

Sen. Charles Grassley, R-Iowa, the committee's chairman, said senators were concerned about the "record profits and significant executive compensation in the oil and gas industry."

"I want to make sure the oil companies aren't taking a speed pass by the tax man," Grassley said in a statement.

With gasoline prices soaring and oil companies announcing record profits, "it's relevant to know what the real financial picture is for this industry," added Montana Sen. Max Baucus, the panel's ranking Democrat.

It's highly unusual for the Senate committee to seek corporate tax records. The last time it made such a request to the IRS it involved the tax records of the bankrupt Enron Corp. But increasing profits from the oil corporations are raising questions of corporate greed, Solorzano reports.

The committee announcement came as Washington scrambled to respond to public anger over soaring gasoline prices, $3 a gallon or more in many parts of the country, and try to contain the political fallout.

Federal Reserve Chairman Ben Bernanke told Congress Thursday that rising energy prices endanger a currently strong economy and left open the option of more interest rate increases to keep inflation from flaring up.