Blumenthal’s Big Oil Windfall Profits Tax would put big oils profiting back in consumer pockets, Families would receive about $360 each year in refunds from big oil
[WASHINGTON D.C.] – With gas prices skyrocketing in recent days against a backdrop of continued Russian aggression in Eastern Europe, U.S. Senator Richard Blumenthal (D-CT) joined Senator Sheldon Whitehouse (D-RI) and several of his Democratic Senate colleagues in introducing the Big Oil Windfall Profits Tax to curb profiteering by oil companies and provide Americans relief at the gas pump.
“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.”
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 the legislation, 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.
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.
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.
The Senate legislation is cosponsored by Jeff Merkley (D-OR), Elizabeth Warren (D-MA), Bernie Sanders (I-VT), 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.