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
"To support continued healthy growth of the economy, vigilance in regard to inflation is essential," said Bernanke, who delivered his most extensive thoughts on the economy in several months.
On Tuesday, Mr. Bush suspended filling of the nation's emergency oil reserve, urged the waiver of clean air rules to ease local gas shortages and called for the repeal of $2 billion in tax breaks for profit-heavy oil companies. He also urged lawmakers to expand tax breaks for the purchase of fuel-efficient hybrid automobiles.
Both Republicans and Democrats said they planned to support rescinding the $2 billion in tax breaks, which included subsidies for exploration in deep waters of the Gulf of Mexico and in geologically or politically difficult regions of the world, as well as royalty relief for certain oil and gas exploration. Executives of the major oil companies said at a recent hearing they do not need those tax breaks.
House and Senate conferees, as part of a broader tax package, were also considering a measure that would change accounting rules involving oil held in inventory, which would force the five biggest oil companies to pay an additional $4.3 million in taxes.
The industry and the White House oppose that measure, viewing it as a form of windfall profit tax that singles out five companies for accounting practices widely used in and out of the oil industry.
Republican leaders and tax writers said they hope to finish work on the broader tax bill this week, but it's not certain the oil inventory tax measure will survive.
In a letter to the IRS, Grassley and Baucus said the tax records of the major oil companies are needed to conduct "a comprehensive review" of the companies' compliance with tax laws.
"As pressure mounts to address extraordinarily high gas prices that consumers are facing at the pump, we feel we should better understand the federal tax posture of the industry," the two senators wrote IRS Commissioner Mark Everson.
In their request, the senators noted not only the industry profits, but "an extremely lucrative retirement plan by one oil and gas industry executive, benefits which may have been subsidized in part by the taxpayers."
The retirement compensation package given by Exxon Mobil Corp. to outgoing Chairman Lee Raymond is said to total $400 million when all pension payoffs and stock options are included.
Red Cavaney, president of the American Petroleum Institute told CBS News correspondent Byron Pitts Wednesday 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."
And Rayola Dougher from the American Petroleum Institute told CBS News' The Early Show that oil companies are not to blame for rising prices at the pump. "I think it's really important to understand the forces at work here, that oil companies don't determine the price of crude oil, that we are part of an international marketplace and that price is determined every day by thousands and thousands of buyers and sellers on that marketplace," Dougher said.
But some states are taking action, planning their own investigations. Florida's attorney general Charlie Crist has launched a probe into prices at the pump.
"We're looking into the fact that these prices continue to go higher," Crist told The Early Show. "There's not any reasonable explanation for it. And what we're looking at is antitrust implications."
"When you don't have more choices for the consumer, when you don't have competition, which is the American way, the consumer gets hit, they get hurt, and that's what we've got to stop and that's what we're looking into," Crist said.