Big Oil Windfall Profits Tax would protect consumers from giant oil companies taking advantage of world events to jack up prices
Washington, D.C. – With gas prices skyrocketing in recent days against a backdrop of continued Russian aggression in Eastern Europe, U.S. Senator Sheldon Whitehouse (D-RI) has introduced the Big Oil Windfall Profits Tax to curb profiteering by oil companies and provide Americans relief at the gas pump. The Senate legislation is cosponsored by Senators Jeff Merkley (D-OR), Elizabeth Warren (D-MA), Bernie Sanders (I-VT), Richard Blumenthal (D-CT), Tammy Baldwin (D-WI), Sherrod Brown (D-OH), Jack Reed (D-RI), Ed Markey (D-MA), Cory Booker (D-NJ), Michael Bennet (D-CO), and Bob Casey (D-PA). Congressman Ro Khanna (D-CA-17) will introduce the legislation in the U.S. House of Representatives.
“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 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.”
“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 Merkley.
“While Putin’s war is causing gas prices to go up, Big Oil companies are raking in record profits,” said Warren. “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.”
“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 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 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 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 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 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 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 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 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.”
“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 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.”
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. Under Whitehouse’s bill, large oil companies that produce or import at least 300,000 barrels of oil per day (or did so in 2019) will 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 big 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.
Smaller companies accounting for roughly 70 percent of the domestic production will be exempt, so oil giants like Exxon Mobil and Chevron cannot simply gouge consumers further without the threat of losing market share.
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. At $120 per barrel of oil, the levy would raise approximately $45 billion per year. At that price, single filers would receive approximately $240 each year and joint filers would receive roughly $360 each year