UN Head whips oil companies for making massive profits on backs of poor people

Aug 05, 2022 News

– Urges governments to implement windfall tax to support vulnerable citizens

By Kiana Wilburg

Kaieteur News – Secretary General of the United Nations (UN), António Guterres has slammed fossil fuel companies for the “excessive and immoral profits” they made during the energy crisis sparked by the Russia-Ukraine war in February last.

UN Secretary General, António Guterres

The Secretary General issued a stern call for the massive gains of these firms to be taxed, and the money returned to vulnerable citizens to help them weather the financial storm. During the Conference of Parties to the Treaty on the Non-Proliferation of Nuclear Weapons at the United Nations in New York City on August 1, 2022, Guterres said it is immoral for oil and gas companies to be making record profits on the backs of the poorest people and communities and at a massive cost to the climate.

The Secretary General said, “The combined profits of the largest energy companies in the first quarter of this year are close to 100 billion US$ dollars.” In fact, Kaieteur News’ research found that oil majors such as Exxon Mobil, Chevron, Shell and TotalEnergies produced a combined profit of US$51 billion in the most recent quarter.

The UN Chief said, “I therefore urge all governments to tax these excessive profits and use the funds to support the most vulnerable people through these difficult times. I urge people everywhere to send a clear message to the fossil fuel industry and their financiers that this grotesque greed is punishing the poorest and most vulnerable people while destroying our only common home, the planet.”

Guterres said many developing countries are drowning in debt without access to finance and are struggling to recover from the COVID-19 pandemic. He said some situations are so dire that nations can go over the brink. “We are already seeing the warning signs of a wave of economic, social and political upheaval that would leave no country untouched,” said the top UN official. He appealed to all global citizens that a firm stance be taken against fossil fuel companies as the current state of affairs is just reprehensible.

According to reports from several international news agencies, Spain and Germany will soon introduce a windfall tax on energy companies from next year to fund measures designed to help citizens cope with inflation. Both territories would be following in the footsteps of Italy, America and Britain which have all introduced the said tax. For those unfamiliar with the term, a windfall tax is a higher tax rate on profits that result from a sudden gain to a particular company or industry, often as the result of a geo-political disturbance, war or natural disaster that creates unusual spikes in demand and/or interruptions to supply.

In America, companies face a 50 percent windfall tax on their mega-profits while a 25 percent is applied to energy firms in the UK. Closer to home, Trinidad and Tobago said in February that it would be strengthening its legislative framework in an effort to net more gains being made by oil companies during the energy crisis.

Guyana is the only country thus far that stands out as the exception on this matter. After giving away major tax concessions and favourable exemptions in the 2016 Stabroek Block Production Sharing Agreement (PSA) to ExxonMobil and its partners, authorities have said there is no interest in going after a windfall tax. They reasoned that upsetting the deal or mood of the investment climate is not part of the administration’s modus operandi.

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