Dec 08, 2022 News
…says citizens “sick and tired” of high oil prices
Kaieteur News – As global economies continue to grapple with the fallout from unusually high oil prices, Bulgaria has been the latest country to impose a windfall tax on oil companies operating in the South Europe state. Business Intelligence group SeeNews said that Bulgaria’s National Assembly on Tuesday adopted changes to its legislation placing a temporary windfall tax of 33 percent on oil, gas and coal companies.
Lawmakers agreed on the windfall tax describing it as a temporarily means toward taxing excessive profits generated by companies active in the crude oil, petroleum refining, natural gas and coal industries. The European Union had agreed for a levy of at least 33 percent aimed at “redistributing some of the extra income energy companies have earned thanks to soaring prices driven in large part by Russia’s invasion of Ukraine.” The Bulgarian Parliament said that the tax will apply to energy firms’ profits for 2022 and 2023 that are 20 percent above the average of the four previous years. It is expected that some 32 companies will be subject to the windfall tax, including the country’s own oil refinery.
In the US state of California, lawmakers are also urging legislation on a windfall profits cap on oil companies. Members of the Last Chance Alliance, Oil and Gas Network and local climate justice groups held a protest in front of the California Energy Commission building on Tuesday prior to a hearing on Big Oil windfall profits. Red, Green and Blue, an American group in support of action against climate change said that the “Elected Officials to Protect America (EOPA) and California’s local electors from frontline communities will talk about how their communities have been affected from gas prices as the oil industry continues to rake in billions of dollars in profits with no regard for how it hurts Californians, our climate and security.” “Advocates will stand in solidarity behind the lawmakers on the west steps of the CA State Capitol,” the group said.
California’s State Senator Henry Stern related that “Profits of ExxonMobil, Chevron, BP, and Shell have skyrocketed 169 percent this year to $125 billion.” “The oil industry is using Putin’s war and inflation as shields to hide their price gouging. Enough is enough. We stand with the people of our state and urge the enactment of a windfall profits cap.”
While crude oil prices were dropping, oil and gas companies were raising prices on California consumers by a record 84 cents per gallon in just 10 days. “Oil refiners more than doubled their CA profits from the recent gas price spikes — making a clear case to enact a windfall profits cap,” said Assemblyman Alex Lee. “It’s high time the people of California see relief from this price gouging. I commend Governor (Gavin) Newsom’s plan for a windfall tax on oil companies and urge legislative action. This is just the latest of countless incidents underlining the urgency for California to become energy independent from fossil fuels,” the Assemblyman stated.
To ensure the placement of the oil fine without triggering the legal requirement of a state vote California Governor has changed the name of the windfall tax on oil company profits to describe it rather, as a “penalty to avoid a requirement that new taxes be passed by a two-thirds vote in the state legislature.”
One after the other, countries around the world have been implementing windfall taxes on energy companies operating in their countries. Their aim is to access some of the massive profits that energy companies are receiving from high commodity cost due initially to demand and sanctions placed on Russia due to its war in Ukraine.
Identified as having the most favourable oil find in the last decade and currently the world’s most prime oil destination, Guyanese stakeholders have called for the imposition of windfall taxes after oil companies operating here, particularly Hess Corporation and Exxon Mobil, reported record-shattering profits. Guyanese authorities have insisted that a windfall tax cannot be placed since its production agreement with the oil partners does not allow it. This is despite hundreds of thousands of dollars to be gained from the unexpected oil profits.
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