Joe Biden, the president, vowed on Monday to increase taxes on oil business profits if major players in the sector do not cooperate to lower petrol prices.
While consumers are finding it difficult to keep up with the high cost of gas, Biden has attacked oil companies for making record-high profits. According to AAA, the cost of a gallon of gas was $3.76 on Monday, down from a record high of almost $5 in June but still more than it was a year ago.
Biden added, alluding to Russia’s conflict in Ukraine, that led to Western sanctions that cut off the country’s oil supply: “Their earnings are a bonanza of war.” “These businesses need to cease profiting from conflict,”
They would have to pay a higher tax on their surplus profits if they don’t, he warned.
The White House’s messaging has centred on how Democrats are working to improve the economy and how Republicans will make it worse with eight days till election day. Voters’ main concerns are typically inflation and the economy, and increased gas costs this year put a strain on consumer finances.
He has emphasised initiatives to lower consumer costs in a number of different areas ahead of the election. In an effort to “provide families more breathing room,” Biden last week announced steps to reduce “junk fees” from banks, airlines, cable companies, and other industries.
Congress would need to approve any new taxes on oil earnings, which could be challenging given that Democrats barely control both chambers of Congress. The notion had previously been proposed by progressives including Senators Elizabeth Warren of Massachusetts and Bernie Sanders of Vermont.
In addition to usually favouring lower taxes, Republicans are hoping to retake one or both chambers of Congress on November 8.
While stating that he is “a capitalist,” Biden also noted that business profits are “so high it’s hard to believe.”
According to Biden, Shell’s third-quarter profits of $9.5 billion were nearly twice as high as they were during the same period previous year. Exxon produced $18.7 billion in profits in the third quarter, which is the largest in the company’s 152-year history and nearly treble what it did the previous year.
In recent weeks, as gas prices have remained high, Biden has pleaded with oil firms to increase output rather than benefit shareholders.
Biden announced the withdrawal of 15 million barrels of crude oil from the Strategic Petroleum Reserve earlier this month. Since the start of the year, the White House has released roughly 165 million barrels of petroleum from the reserve, out of an anticipated 180 million.
When oil prices reach $70 per barrel, as stated in his earlier address, Biden will buy more to replenish the reserve. Therefore, he advised businesses to make investments in greater production now, knowing that the government would buy the oil later.
An inquiry for comment regarding Biden’s statements was not immediately answered by the American Petroleum Institute, a trade association for the oil and natural gas industries.