USA aiming to slap 50% tax on oil companies

Jun 05, 2022 News

…had already increased its royalty from 18 ¾ % in December
…as politicians in Guyana call any increase ‘breach of contract’

Kaieteur News – The United Kingdom recently slapped its oil companies with a one off windfall tax of 25 percent on all oil companies operating in that jurisdiction in order to also partake in the sweeping profits being had by the operators as a result of the escalating oil price on the world market due in large part to the war being waged between Russia and Ukraine.

Democratic Congressman Adam Schiff (Tom Williams/CQ Roll Call)

As such, the US is looking to follow suit, having already hiked its royalty payable by oil companies there to above the 18.75 percent in December last.
Democratic Congressman from the State of California, in the US, Adam Schiff, on Tuesday last announced the new legislation to lower gas prices and to bring immediate relief to Americans struggling to pay the out-of-control prices at the pump by instituting a suspension of the federal gas tax.
Schiff, at a press conference to announce the move, said that “for months now, a combination of Vladimir Putin’s invasion of Ukraine, ongoing supply chain issues, and price gouging by the oil companies have been steadily driving up the price of gasoline to more than US$4.50 a gallon nationwide and more than US$6 a gallon here in Los Angeles.”
According to Schiff, “in spite of this volatility, one thing has remained the same: Big Oil’s skyrocketing profits.”
He posited, “this is exploitation, plain and simple, and it’s unacceptable to all of the people who are having to spend hundreds of dollars more every month just to go about their daily lives, at a time when so many are already struggling to make ends meet.”
The proposed legislation, namely the Federal Gas Tax Suspension and Windfall Profits Tax Act, would suspend the federal gas tax – which currently stands at 18.3 cents per gallon – through December 31, 2023.
It was noted that to ensure the Highway Trust Fund is still robustly funded, the suspension would be paid for through a new 50 percent tax on Big Oil’s windfall profits.
According to Schiff, “we can help bring down the cost of oil by suspending the gas tax and paying for it with a windfall profits tax on oil companies.”
This, he said, will provide immediate financial relief for consumers and do so in a revenue-neutral way that will ensure the transportation projects people also rely on continue to move forward.
At the end of the day, Congress needs to choose between the interests of commuters and those of Big Oil, “I know what side I’m on,” Schiff added.
It was noted that as a result of the war between Russia and Ukraine, the five biggest oil companies — Shell, Chevron, ExxonMobil, ConocoPhillips and BP — have increased their profits by over 300 percent in the first quarter of the year compared to 2021, amassing $35 billion in just three months.
Additionally, even at times when oil prices have fallen, gas prices have hit new highs, proof that Big Oil is profiteering off of the volatility while exploiting American workers and families.