As gasoline prices have risen in recent days amid continued Russian aggression in Eastern Europe, U.S. Senator Bob Casey (D-PA) joined his Senate colleagues in presenting the oil windfall tax law to curb oil company profits and relieve Americans. at the gas pump.
The legislation would impose a new excise tax on oil extracted or imported by major oil companies, and revenue from a windfall tax on these companies would be returned to consumers in the form of a quarterly refund.
“Between Putin’s war driving up gas prices and big oil companies profiting from the hike, American workers are being squeezed at the gas pump. It’s never been clearer that we need to reduce our dependence on foreign oil and build an energy economy that works for middle-class families. This legislation would ensure that oil companies do not profit off the backs of hard-working Americans by requiring companies to donate half of their excess profits to American families. This is just one step we can take to reduce costs for families and build an economy that works for families, not businesses,” said Senator Casey.
The price of a gallon of gasoline is up more than 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 causing governments to limit imports of Russian energy to help protect the Ukrainian people.
At the same time, the major oil companies are reaping near-record profits. In 2021, ExxonMobil’s profits jumped more than 60% from pre-pandemic levels to more than $23 billion. During the same period, the price of a gallon of gasoline has gone from an average of $2.69 to $3.41 and is currently over $4.
Under this bill, major oil companies that extract or import at least 300,000 barrels of oil per day (or did so in 2019) will owe a tax per barrel equal to 50% of the difference between the current price per barrel of oil and the average price per barrel before the pandemic between 2015 and 2019. Small companies representing about 70% of national production would be exempted, so that oil giants like Exxon Mobil and Chevron cannot simply exploit more consumers without threatening to lose market share.
Revenue generated from windfall profits by big oil companies would be returned to consumers in the form of a quarterly rebate. With the price of oil currently above $120 a barrel, the tax would raise about $45 billion a year. At this price, single registrants would receive approximately $240 per year, while co-registrants would receive approximately $360 per year.
This legislation is led by U.S. Senator Sheldon Whitehouse (D-RI) and co-sponsored 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), Ed Markey (D-MA) and Cory Booker (D-NJ). US Congressman Ro Khanna (D-CA-17) also introduced the legislation in the US House of Representatives.