March 10, 2022
As Gas Prices Rise, Warren, Whitehouse, Khanna, Colleagues Introduce Bill to Stop Big Oil Profiteering and Provide Consumers Relief
Big Oil Windfall Profits Tax Prevents Oil Companies from Taking Advantage of Global Conflicts to Jack Up Prices and Line Their Pockets
Washington, D.C. – U.S. Senator Elizabeth Warren (D-Mass.), a member of the Senate Finance Committee, Senator Sheldon Whitehouse (D-R.I.), and ten other Senate colleagues introduced the Big Oil Windfall Profits Tax to curb profiteering by big oil companies and provide Americans consumers relief at the pump. Representative Ro Khanna (D-Calif.) will introduce the legislation in the House of Representatives. The legislation would levy a per-barrel-tax on big oil companies' pandemic profiteering prices and return the revenue to consumers as a quarterly rebate.
“While Putin's war is causing gas prices to go up, Big Oil companies are raking in record profits. We need to curb profiteering by Big Oil and provide relief to Americans at the gas pump — that starts with ensuring these corporations pay a price when they price gouge, and using the revenue to help American families,” said Senator Warren.
“While the U.S. severs economic ties with Putin to protect our national security, I am committed to doing everything in my power to limit the fallout for Rhode Islanders who were already getting squeezed before this happened,” said Senator Whitehouse. “We’ve seen this script before, and we cannot allow the fossil fuel industry to once again collect a massive windfall by taking advantage of an international crisis. I propose sending Big Oil’s big windfall back to the hardworking people who paid for it at the gas pump. Over the longer term, speeding up the transition to renewables will lower energy costs, insulate consumers from price spikes, and reduce Western nations’ dependence on foreign despots and greedy fossil fuel companies.”
“This is a bill to reduce gas prices and hold Big Oil accountable. As Russia’s invasion of Ukraine sends gas prices soaring, fossil fuel companies are raking in record profits. These companies have made billions and used the profits to enrich their own shareholders while average Americans are hurting at the pump,” said Representative Khanna. “I’m glad to introduce this legislation with Senator Whitehouse that will provide an incentive to cap gas prices and put money back in the pockets of consumers.”
“We have to cut off the Russian oil sales that are funding Putin’s war crimes in Ukraine. Americans want to put pressure on Putin, but they need help with high gas prices. So let’s tax oil companies’ war profiteering and send gasoline rebate checks to Americans,” said Senator Merkley.
“We can no longer allow big oil companies, huge corporations and the billionaire class to use Putin’s murderous invasion of Ukraine and the ongoing pandemic as an excuse to price gouge consumers. It is time to enact a windfall profits tax,” said Senator Sanders.
“Wisconsin is feeling the Putin price hike at the pump and we cannot afford to have big oil corporations taking advantage of market disruptions to pump up their profits,” said Senator Baldwin. “I support this legislation because it can provide some economic relief to working families and help put their pocketbooks ahead of more profits for big oil.”
“Big oil companies are making near-record profits, while Ohioans pay more than ever for gas,” said Senator Brown. “This bill will crack down on Big Oil price gouging, and guarantee that consumers in Ohio and across the country get money directly back in their pockets if Big Oil continues to rake in record profits.”
“We need to stop big oil companies from exploiting Russia’s savage invasion to profiteer and rake in record profits—making consumers pay the price,” said Senator Blumenthal. “This bill will clamp down on big oil corporations’ despicable price gouging with targeted taxes while ensuring consumers pay less.”
“Oil giants are gushing profits due to the global spike in oil and gas prices over the last year. Meanwhile, consumers and businesses are shouldering all of the burden and paying more at the pump. The federal government doesn’t control the price of oil, but we can and should ensure that instead of funneling record cash back to big oil, this targeted, temporary windfall tax would deliver real relief at the gas pump. This bill will help working families, strengthen our economy, and still allow oil companies to profit without exploiting the American people,” said Senator Reed.
“Oil companies have had decades to deliver on the promise of energy independence, but instead they got record exports and record profits, while Americans got volatile gas prices and record climate disruption,” said Senator Markey. “Instead of an economy creating windfall profits, we need one creating wind power energy. This bill will protect consumers from profiteering, particularly as Putin’s war on Ukraine causes the globalized fossil fuel market to hike up American gas prices.”
“We need to use every tool at our disposal to protect Coloradans from rising energy costs and provide them relief, and this legislation will help us do that,” said Senator Bennet. “As Putin wages a reprehensible, lawless war on Ukraine and sends the global energy market into chaos, we need to hold large oil and gas companies accountable and prevent them from using this moment to exploit American consumers. We also urgently need to invest in America’s clean energy economy to cut costs for families and strengthen our energy independence, which we can do by passing the extension and expansion of the clean energy tax credits included in the Finance Committee’s budget package.”
“Between Putin’s war driving up gas prices and big oil companies profiteering off the rise, hardworking Americans are getting squeezed at the gas pump,” said Senator Casey. “It has never been more clear that we need to reduce our dependence on foreign oil and crack down on companies taking advantage of a volatile market. This legislation would ensure oil companies aren’t profiting off the backs of hardworking Americans by requiring corporations to return half of their excess profits to American families. This is just one step we can take to lower costs for families and build an economy that works for families, not corporations.”
The price of a gallon of gasoline is up well over a dollar from a year ago, and the price of a barrel of oil is double what it was before the pandemic. Russia’s invasion of Ukraine has further disrupted an already volatile global oil market by reducing supply and leading governments to limit imports of Russian energy to help protect the Ukrainian people. At the same time, big oil companies are reaping near-record profits. In 2021, ExxonMobil’s profits jumped over 60 percent over pre-pandemic levels to more than $23 billion. Over that same time period, the price of a gallon of gasoline rose from an average of $2.69 to $3.41. It currently stands at over $4. This increase is not justified by increases in the cost of domestic production, but is driven by international markets controlled by fossil fuel cartels.
The Big Oil Windfall Profits Tax would provide consumers guaranteed relief while maintaining American competitiveness and reducing pressure on inflation by attacking corporate profiteering. The legislation would make large oil companies that produce or import at least 300,000 barrels of oil per day (or did so in 2019) owe a per-barrel tax equal to 50 percent of the difference between the current price of a barrel of oil and the pre-pandemic average price per barrel between 2015 and 2019, a period when large oil companies were already earning large profits. The quarterly tax will apply to both domestically produced and imported barrels of oil to ensure a level playing field.
Revenue raised from the windfall profits of big oil companies will be returned to consumers in the form of a quarterly rebate, which would phase out for single filers who earn more than $75,000 in annual income and joint filers who earn more than $150,000. With oil currently priced at more than $120 per barrel, the levy would raise approximately $45 billion per year. At this price, single filers would receive approximately $240 each year, while joint filers would receive roughly $360 each year.
Senator Warren has led the fight to crack down on corporations abusing their market power and engaging in corporate profiteering to protect American consumers and bring down costs:
- In February, Senator Warren called out corporations for abusing their market power to raise consumer prices and boost profits during a hearing.
- In February, Senator Warren called out private equity and other Wall Street investors at a hearing for exacerbating inflation by jacking up prices and released responses from three corporate landlords that have been increasing rents, driving up housing costs, and raking in profits amid housing shortage.
- Senator Warren called on Commerce Secretary Raimondo to use CHIPS for America Act funding to push back against industry consolidation in the semiconductor industry, address supply-chain resiliency, and bolster competitiveness in the industry. The global chip shortage has resulted in significant price increases for American families and contributed to the recent increases in inflation, as well as job losses due to auto plant shutdowns.
- Senator Warren slammed Hertz’s $2 billion dollar buyback plan, which would line the pockets of company executives and the private equity firm Apollo Global Management, while they raise rental car costs for consumers.
- Senator Warren called out the 11 energy companies for inflating natural gas prices for consumers while reaping record profits.
- Senator Warren called on the Department of Justice to investigate the poultry industry’s anticompetitive behavior as turkey and chicken prices have soared.
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