Windfall Tax On Oil Profits Needed After “Forecast-Busting First-Quarter Earnings “
The news should not startle anyone who feels like they need a bank loan to fill the gas tank on their car. Gasoline prices have rocketed, and predictions are that things will get worse. Now comes word that forecast-busting first-quarter earnings were reported by oil companies which only adds salt to the wound.
BP PLC and Royal Dutch Shell PLC, Europe’s two biggest oil producers, posted forecast-busting first-quarter earnings on Tuesday thanks to record crude oil prices that are expected to bolster profits across the industry.
BP posted a 63 percent surge in first-quarter net profit to $7.6 billion (4.9 billion euros), while Shell reported a 25 percent rise, to a record $9.08 billion (5.81 billion euros).
Revenue at BP jumped 44 percent to $89.2 billion (57.1 billion euros), while sales at Shell soared 55 percent to $114 billion (72.95 billion euros).
Last week ConocoPhillips reported a 16 percent rise in net income to $4.14 billion. Like BP and Shell, the third biggest U.S. producer far outpaced industry expectations. More big profits are expected from the biggest two U.S. companies, Exxon Mobil Corp. and Chevron Corp., when they report first-quarter earnings later this week.
The combined profits of $17 billion, at a time when Americans are falling behind on mortgage payments, and struggling to find the money to fill the tank just to get to work, should alert the White House about the need for legislative action.
Clearly there must be a windfall tax on oil profits, a remedy that has long been proposed, and one I strongly support. Some of the smarter politicians understand the need for such a response.
“With the price of oil and gas skyrocketing, and the big oil companies continuing to enjoy record-breaking profits the time has come, among other things, to impose a windfall profits tax on the oil companies so that consumers don’t get gouged at the pump,” Senator Sanders said in a news release. “Congress and the president must say ‘no’ to the $213 million in campaign contributions that the oil industry has given to them since 1990 and ‘yes’ to consumers by taking this important step.”
The Bush White House has been too cozy with oil interests while the economic conditions for average and low income Americans have deteriorated. Things are not going to get better as predictions of $200 a barrel oil is now being talked about.
Opec’s president on Monday warned oil prices could hit $200 a barrel and there would be little the cartel could do to help.
The comments made by Chakib Khelil, Algeria’s energy minister, came as oil prices hit a historic peak close to $120 a barrel, putting further pressure on global economies.
The prices for goods and services are climbing in the US, and the high price that truckers need to pay for fuel is the chief reason why.
Dave Gares, an independent truck driver since 1974 who hauls mostly soft drinks these days, never dreamed he’d be paying more than $4 per gallon for diesel.
It takes 220 gallons to fill up his tractor-trailer rig, which gets a little over six miles per gallon on the road. It costs Gares up to $1,400 to fill up, with the added cost of fuel additives to boost his truck’s mileage. He said he has to absorb the increases to stay competitive.
Clearly there needs to be a response to the obscene oil company profits that sap the incomes of families in America.