The panel asked the IRS for the companies' tax returns. One of those oil companies, ConocoPhillips, today became the first of the Big Three to report first-quarter profits. Its profits rose 13 percent as stronger exploration and production results yielded the best first-quarter earnings since Phillips Petroleum Co. and Conoco Inc. combined in 2002.
The Senate Finance Committee promised "a comprehensive review of the federal taxes paid" by the oil companies on their record profits last year.
Sen. Charles Grassley, R-Iowa, the committee's chairman, said the panel was concerned about high profits and executive compensation at oil companies.
"I want to make sure the oil companies aren't taking a speed pass by the tax man," said Grassley 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," Montana Sen. Max Baucus, the ranking Democrat on the committee, said.
It's highly unusual for the Senate committee to seek corporate tax records. The last time it was done was when the panel asked the IRS for the tax records of Enron Corp.
Protests of high gas prices have already begun. In Atlanta, a group of area residents protested rising gas prices today and called for a boycott. The group from Georgia Employees Association rallied along Candler Road in South Dekalb County. They want consumers to send a message to big oil companies by avoiding certain stations and by cutting back on gasoline purchases overall by taking mass transit, joining carpools, and cutting back on weekend driving.
"Can you imagine if nobody went in to buy gas on Saturday and Sunday?" said protester John Evans.
ConocoPhillips is the first oil company to announce record profits, but it's no doubt not the last. Tomorrow Exxon/Mobil is projected to announce more than $9 billion in profits — for the first quarter alone, reports CBS News national correspondent Byron Pitts, and on Friday Chevron is expected to announce Close to $4 billion in profits.
The American Petroleum Institute, an industry trade group, is spending millions of dollars in newspaper and television ads to convince Americans that their profits have nothing to do with higher gas prices, Pitts reports.
Red Cavaney, president of the American Petroleum Institute told Pitts that the industry can't lower their profits because they have a responsibility to their shareholders.
"All of the companies here in the U.S. that deal with the consumer are investor-owned companies. ... The responsibility of the management there is to insure that that they are providing for shareholder return."
ConocoPhillips' net income jumped to $3.29 billion, or $2.34 per share for the January-March period, from $2.91 billion, or $2.05 per share, in the year-earlier period. Those results were in line with analysts' expectations, according to Thomson Financial.
Revenue at ConocoPhillips grew to $47.9 billion in the first quarter from $38.9 billion last year. The company said higher oil prices were partially tempered by lower natural gas prices compared with the fourth quarter.
Fadel Gheit, analyst with Oppenheimer & Co., said things will only get better for the company, citing its $33.9 billion acquisition of Burlington Resources completed March 31.
The swelling oil company profits and soaring gasoline prices have prompted both political parties to scramble to gain the high ground on an issue of extreme importance to many voters.
President Bush announced several initiatives Tuesday aimed at curbing the high price of filling up. He relaxed clean-fuel standards and ordered a temporary halt to deposits to the nation's strategic petroleum reserve — ostensibly making more oil available for consumer needs and relieving pressure on pump prices.
The president also vowed to pursue any collusion or price gouging and directed the Justice Department to help states pursue allegations that "gas prices have been unfairly manipulated."
Democrats dismissed Mr. Bush's actions as too little and too late.
Sen. Chuck Schumer, D-N.Y., said big oil companies were the culprits behind runaway gas prices, which, he says, go "way beyond what supply and demand would merit."
He said Mr. Bush refused to "get tough on big oil."
In an interview with CBS News, another Democrat, New York State Attorney General Eliot Spitzer, said taking action only after prices skyrocketed at the pumps showed a lack of preparation and insight by the Bush administration.
With daily global demand at roughly 85 million barrels per day, the world's oil producers have less than 2 million barrels per day of spare production capacity. This means that amid a tight global market, tensions with oil-rich nations and increased demand, particularly in China, have severe effects on the commodities market — and at the pump.
"I would suggest that in the international markets, there is a disequilibrium," Spitzer told CBS News correspondent Russ Mitchell. "We have seen demand for oil increase dramatically year after year, especially due to the increase in demand in the Asian markets," which the Bush administration could have anticipated, Spitzer claimed.