Senate panel to oil execs: Why?

A gas price display is changed at a Chevron gasoline to display a record high.

TEXT OF STORY

Scott Jagow: I imagine a lot of people are calling their congressional representatives and asking: Why is oil $130 a barrel? Why does it cost $60 dollars to fill up my gas tank? So today, a Senate committee will take those questions straight to oil company executives, and ask them why? Dan Grech reports.


Dan Grech: What the senators will get, says Jorge Pinon with the University of Miami, is a shrug.

Jorge Pinon: It is futures market, just like corn, just like wheat, just like orange juice, that sets the price of oil --- not international oil companies.

He says private oil companies have direct control of just 10 percent of the world's reserves. The lion's share is in the hands of governments like Venezuela, Nigeria and in the Middle East.

Pinon says there's only one country in the world right now with control over world oil prices. And it's not the United States.

Pinon: It is Saudi Arabia, the only country in the world that today has spare production capacity of about one million barrels per day.

President Bush recently asked Saudi Arabia to open the valves. The Saudi royal family answered him with a shrug.

I'm Dan Grech for Marketplace.

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