President Biden has accused oil companies of ‘war profiteering’ and threatened them with a surprise tax. But will it help with gas prices?
In the wake of scorching inflation and Russia’s war in Ukraine, big gas companies like Chevron and Exxon Mobil are turning a profit. And it makes President Joe Biden anxious.
In November, days before the midterm elections, Biden launched an attack on the industry, calling their record profits a “wind of war,” not the result of anything. “new or innovative”.
And now, his international energy envoy is calling on oil companies to think of the American consumer.
Amos Hochstein told the Financial Times: “I think the idea is that financiers would tell companies in the United States not to increase yields and buy back shares and raise dividends when profits are at all-time highs. great is outrageous. “That’s not only un-American, but it’s also very unfair to the American public.”
“You want to pay dividends, pay dividends. You want to pay dividends, pay dividends. You want bonuses, do it. You can do all that and still invest more. We asks you to increase the output and seize the moment.”
With gas prices still soaring, and many households struggling in a expensive winterBiden says he’s ready to force these oil companies to act — but while his words for these companies may be powerful, he may not have the power to support them. .
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Biden doesn’t twist his words
Biden has been waging war with oil companies for the past few months, but he escalated it in November when he called on them to “act beyond their narrow self-interests” to “invest into the United States by increasing production and refining capacity” on behalf of “consumers, their communities, and their country.”
And if they don’t? Biden warned that they would face “higher taxes on their excess profits and… higher restrictions.”
The president did not specify what those restrictions might be, but promised that his administration would work with Congress to assess all available options.
“It’s time for these companies to stop profiteering from war, fulfill their responsibilities in this country, and give the American people a break,” Biden added.
The oil companies are back
Although gasoline has fallen from a record high of more than $5/gallon in June, it is currently hovering around $3.18. And that, along with a dangerously low oil supply and one diesel stockpile is running out is clearly weighing on Biden.
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But the oil companies claim they have contributed to the cause. Exxon Mobil CEO Darren Woods took a moment during the company’s third-quarter earnings call on October 28 to address the issue with Biden. “There has been discussion in the US about our industry returning some of the profits directly to the American people,” Woods said. “That’s exactly what we’re doing in the form of a quarterly dividend.”
The President is not happy with that, tweet his response hours later: “I can’t believe I have to say this, but delivering returns to shareholders doesn’t mean lowering prices for American families.”
Any taxes will face an uphill battle
Biden appears to be proposing a “surprise” tax to redistribute profits to American consumers pay for the pump. But even with Biden’s backing, there’s no guarantee he’ll be able to pass a new corporate tax. To do that, he needs the backing of Congress, and with the House now controlled by Republicans and Democrats holding a tight lead in the Senate, that looks like a long way off. long road.
He seems ready to compromise, though. According to a report in Bloomberg, Energy Secretary Jennifer Granholm spoke to oil and gas executives in Washington in mid-December at a meeting of the National Oil and Gas Council, an outside federal advisory group with members from Exxon Mobil Corp. and Royal Dutch Shell Plc.
“We are very excited to work with you,” Granholm said, adding that fossil fuels will likely be around for a while.
She also admitted the authorities have “butted heads” with the industry, calling it “the elephant in the room.” And with growing demand and diesel shortages in the northeast, she says the authorities are aware fossil fuel production will need to increase soon.
However, the president is unlikely to back down completely. In November, Exxon and Chevron, two of the country’s largest oil companies, reported huge profits for the fourth straight quarter. That same day, during a press conference from the White House, Biden indicated that six of the largest companies had “made $70 billion in profits” in just 90 days.
Horrified that all that money would be returned to their shareholders and executives, Biden made a promise: “I will continue to pursue it. [These companies] talking about me picking them, they haven’t seen anything yet. That’s what I mean. It offends me.
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