How much have oil and gas companies earned in 2022 and what would the windfall tax be?
The US president said he will look at taking action against “war profiteers” if they refuse to invest their profits into the country.
US President Joseph Biden levied his fury on to gas companies as high prices for consumers have led to record profits, reenergising calls for more action to be taken while millions could suffer this winter.
The oil industry “has not met its commitment to invest in America and support the American people,” Biden said, “profits so high it is hard to believe.”
“Their profits are a windfall of war,” he said. If they passed those profits on to consumers, gasoline prices would be down about 50 cents, he said.
“If they don’t, they’re going to pay a higher tax on their excess profits, and face other restrictions,” he said. “It’s time for these companies to stop war profiteering.”
The remarks come after oil giants BP and Shell posted quarterly profits of $8.2 billion $9.5 billion respectively, both figures more than double the same period last year.
With midterm elections in one week, the Democrats are looking for any support on the economy. The Republican party has weaponised it as an election tool; it’s easy to attack the incumbent government while everyone is getting poorer.
Why are oil prices so high and companies making such huge profits?
Consumers in the west have been hit by spiralling fuel costs from the Russian invasion of Ukraine. The closing of oil and gas pipelines from Russia to Europe was particularly serious as Russia was the largest fuel supplier for many European countries.
Nations have not been helped by the apparent backing of russing by OPEC, the oil production union of nations. It has scaled back production further driving up prices and leaving President Biden red-faced as he went to Saudi Arabia cap in hand a week prior to the decision. The shortness of supply has given oil companies the opportunity to hit record profits.
Nations in Europe have already taken measures to tax oil companies more. In July, the British government approved a 25% windfall tax on oil and gas producers in the British North Sea that was expected to raise nearly $6 billion in one year to help people struggling with soaring energy bills. Bills are expected to hit $6,000 a year for the average house from April.