JEREMY HOBSON: The national average for a gallon of regular unleaded gasoline is now $3.98. And as cash-strapped drivers look for answers Congress will be asking some questions about tax breaks for oil companies. Today executives from the five biggest oil firms will testify at a Senate Hearing.
Marketplace's David Gura reports from Washington.
DAVID GURA: Some senators say the U.S. can't afford to give tax incentives to energy companies, especially when they're pulling in record profits.
But Julian Lee, an analyst with the Centre for Global Energy Studies, says CEOs will argue this is not about their bottom line.
JULIAN LEE: It's about making operations in the United States competitive with operations that those same companies could undertake in West Africa, or in the Caspian Sea, or Brazil, or anywhere else in the world.
Executives will also face questions about the climbing cost of oil. Caroline Bain is with the Economist Intelligence Unit.
CAROLINE BAIN: Consumption of oil has been growing strongly, particularly in the developing world, and what with the removal of Libyan oil from the market, the market has tightened quite a lot.
She says prices have also gone up because of speculation.
BAIN: At a time of very low interest rates, investors have been piling into commodities markets and the oil market.
According to Bain, oil producers want to find a price that's just right. High enough to finance their fiscal needs -- but low enough to keep Americans from changing their driving habits.
In Washington, I'm David Gura for Marketplace.
STEVE CHIOTAKIS: The price of oil is down to $97.00 a barrel in trading today. The world's biggest commodity's been tanking because of lower demand in the United States. Meanwhile today, the CEOs of America's largest oil companies will face tough questions from the Senate Finance Committee.
Marketplace's David Gura is live in Washington. Good morning, David.
DAVID GURA: Good morning Steve.
CHIOTAKIS: So why are these executives testifying?
GURA: Well, the cost of oil has gone up, and that's because there's new demand from emerging markets, like China and India. And on top of that, there's turmoil in North Africa and the Middle East. Senators want to know what could bring down the price of gas. And some of them want Congress to reconsider the tax breaks these companies get. Especially after another year of record profits.
CHIOTAKIS: All right, well, the record profits -- that's the thing. That seems to be where the tension is coming from, right?
GURA: Yeah, critics say these companies would be just fine without those tax breaks, that politicians are trying to cut the deficit. And the U.S. can't afford them.
I talked to Julian Lee, an analyst with the Centre for Global Energy Studies. He says he expects the CEOs will argue this is not about their bottom line.
And the hearing's scheduled to start in about three hours. We'll wait and see.
CHIOTAKIS: All right, Marketplace's David Gura, in Washington. David, thanks.
GURA: Thank you.