Apr 28, 2022
As congressional Democrats held a press conference Thursday to discuss legislative proposals to reduce gasoline prices and crack down on fossil fuel corporations that are raking in record amounts of money amid Russia's war on Ukraine, a progressive group redoubled its call for a windfall profits tax on Big Oil--calling it the "right solution" that is popular and "already under their noses."
"The clearest and most popular way to get direct relief to the public and to check Big Oil's rampant war profiteering is with a windfall profit tax."
"Big Oil has profiteered and exploited the marketplace," House Speaker Nancy Pelosi (D-Calif.) told reporters. "They are hoarding the windfall while keeping prices high at the pump."
With recent polls showing that large swaths of the U.S. electorate are concerned about the escalating cost of energy, food, and other basic goods--and disapprove of President Joe Biden's handling of the economy as his party looks to maintain control of both chambers of Congress during the upcoming midterm elections--Senate Democratic Majority Leader Chuck Schumer (D-N.Y.) called oil companies "vultures" and said that legislation to lower gas prices "is at the very top of our list."
House Energy and Commerce Committee Chairman Frank Pallone (D-N.J.) told reporters that Democratic lawmakers are working on a bill that would give the U.S. Federal Trade Commission (FTC) and state attorneys general "increased authority, including civil penalty authority, to go after oil companies and retailers that are gouging their customers and would cover both wholesale and retail sales."
The FTC already has the power to take action against those who manipulate wholesale oil markets by making it illegal to report false information to inflate prices.
Legislation now being drafted by Senate and House committees would double the penalty for manipulating these markets to $2 million per day per violation.
According to a draft of the legislation, the FTC could enforce similar rules in retail markets and include biofuels. It would create a new FTC unit to monitor and analyze the prices of crude oil, gasoline, diesel, home heating oil, and others.
Neither Schumer nor Pelosi indicated when the bill will be voted upon or how much money it could save consumers if signed into law. It is also unclear if the measure will attract enough Republican support to clear the Senate's 60-vote filibuster rule.
"Americans want relief from high gas prices and accountability for those responsible, so we're glad to see Democrats taking some steps forward to investigate price gouging by oil and gas executives," Jamie Henn, a spokesperson for the Stop the Oil Profiteering (STOP) campaign, a project of Fossil Free Media, said in a statement.
"However, the clearest and most popular way to get direct relief to the public and to check Big Oil's rampant war profiteering is with a windfall profit tax," said Henn.
According to survey data released just days after the legislation was unveiled, a whopping 80% of U.S. voters--including 73% of Republicans--support the measure, which would hit large fossil fuel companies with a per-barrel tax equal to 50% of the difference between the current price of a barrel of oil and the average price per barrel between 2015 and 2019. An estimated $45 billion in annual revenue would be redistributed to U.S. households in the form of quarterly rebates.
"There is vast, bipartisan support for this policy," Henn said, "because the public knows oil and gas billionaires are responsible for the pain at the pump."
Henn has argued in recent weeks that Biden's moves to release millions of barrels of oil from the nation's strategic reserves and suspend seasonal regulations on ethanol blending won't halt "Big Oil's coordinated campaign to gouge Americans."
Since consumer demand returned following a brief pandemic-driven decline in 2020, shareholders have pressured oil producers to suppress production to drive prices higher. Last year, as average gas prices in the U.S. steadily climbed--hitting around $3.40 per gallon in December 2021, up from $2.10 a year before--25 of the world's biggest fossil fuel corporations raked in a record $205 billion in profits.
Oil and gas companies have hiked prices even further during the first four months of 2022--especially after Biden's early March announcement of a U.S. ban on imports of Russian fossil fuels, leading to growing accusations of war profiteering. The average price for a gallon of gas in the U.S. is now hovering around $4.14, and petroleum giants are bragging about their "best quarter ever."
Despite being brought to Capitol Hill to testify before Congress about their role in jacking up gas prices, U.S. fossil fuel executives--projected to reap up to $126 billion in extra profits this year--have not been shy about how they are capitalizing on the crisis in Ukraine.
Earlier this week, Schumer said from the Senate floor that "there is something deeply wrong, deeply wrong, about seeing the largest oil and gas companies in the world drench top executives and wealthy shareholders with cash while Americans are struggling at the pump."
To put an end to such behavior, dozens of progressive advocacy groups have been urging Schumer and Pelosi to support the Big Oil Windfall Profits Tax, which Sen. Elizabeth Warren (D-Mass.) has said can help Democrats avert "big losses" in this year's midterms.
"It's time Democratic leadership got on board and pursued this winning policy as soon as possible," Henn said Thursday.
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