Price-Gouging Oil Companies Need to Pay a Windfall Tax

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Price-Gouging Oil Companies Need to Pay a Windfall Tax

Even before Vladimir Putin’s invasion of Ukraine shocked energy markets and sent oil prices to over $100 a barrel, Exxon was obscene banking profits. On February 1, the Texas-based fossil fuel giant announced profits of almost $9 billion for the fourth quarter of 2021—its biggest take in seven years. Exxon didn’t have to party alone; Chevron, Shell, and BP were announcing surpluses of only slightly less starting proportions.

“Combined, the four companies raked in $24.4 billion in quarter four of 2021, bringing their total profits for last year to over $75.5 billion. Chevron, Shell, BP, and Exxon used these bloated profits to shower billions onto their shareholders—including their wealthy executives whose salaries are heavily padded with stocks,” reported the watchdog group Accountability.US. “In 2021, the four companies bought back over $6.6 billion in stocks while hiking up their dividends. And the oil giants are planning for an ‘even better’ 2022 for shareholders, with plans already in place to buyback over $22 billion in stock thanks to high oil prices.”

In fact, 2022 could be dramatically better for Exxon and the other major oil companies.

Now that the United States is refusing to buy Russian oil, prospects for profiteering by energy conglomerates have expanded exponentially. Prices at the pump are shooting up to a national average of $4.17 a gallonthe highest charge in the nation’s history.

President Joe Biden acknowledged the problem when he announced the US embargo against Russian oil Tuesday. “Russia’s aggression is costing us all, and it’s no time for profiteering or price gouging,” he said. “This is a time when we have to do our part and make sure we’re not taking—we’re not taking advantage.”

Unfortunately, “taking advantage” is what oil companies do. The public-interest environmental law group Earth justice observed this week, “While Ukrainians fight for their lives, the oil industry has pounced on an opportunity to profit economically and politically.” how? With further spikes in gas prices and a predatory lobbying strategy that seeks to leverage the crisis for all it is worth.

“The oil and gas industry and their allies in Congress have pushed a false narratives that the fault of rising gas prices lies with the White House and are shamelessly preying on the fears of working families concerned about prices at the pump to extract big regulatory policy wins to enhance their future profits,” said Drew Caputo, Earthjustice’s vice president of litigation for lands, wildlife, and oceans. “Big Oil’s latest demand—immediately open more public lands for drilling—is both illegal and will do nothing to lower gas prices for everyday Americans.”

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