Oil industry groups are reacting to President Joe Biden’s threat on Monday of a potential profits tax or other consequences if oil companies do not invest in increasing US production and lowering consumer prices.
In his remarks on Monday, the president argued that oil companies’ recent profits were a “war scam” in Ukraine, and urged them to direct any surplus to increase their US production and refining capacity and to lower the gas prices that Americans see at the pump. He said he believes they have a “responsibility to act in the interests of their consumers, their communities and their country.”[ads1];
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“If they don’t, they’re going to pay a higher tax on their profits and face other restrictions,” Biden said. “My team will work with Congress to look at these options that are available to us and others. It’s time for these companies to stop war profiteering.”
In a statement Monday, American Petroleum Institute (API) President and CEO Mike Sommers said American families and businesses are “looking to lawmakers for solutions, not campaign rhetoric.”
Sommers also accused the Biden administration of taking credit “for every cent of decline in gas prices, but when prices go the other way, the finger-pointing begins” in a call with reporters Tuesday morning.
He claimed “increased taxes on American energy discourage investment in new generation” in both the statement and the call with reporters, stating that global markets determine gasoline prices. He also told reporters that “bad politics matter.”
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Appearing on “Kudlow” in the afternoon, Sommers pushed back on Biden’s “war profiteering” comment.
“The charge they made against this industry – an industry that, by the way, self-sanctioned and refused to take more Russian crude at the beginning of this terrible war that was going on in Europe, an industry that pulled out of Russia on its own without bandai from the federal government – for them to say that this industry, the most patriotic industry that I know in our country, would be war profiteering is an absolutely outrageous comment,” he said.
Chet Thompson, CEO and president of American Fuel and Petrochemical Manufacturers, accused Biden of being “more concerned with political posturing” ahead of the midterms than “advancing energy policies that will actually deliver for the American people.”
“A windfall profits tax may make good soundbites, but as a policy it is bad for consumers,” he said in a statement. “It will probably hinder fuel production and make matters worse for the drivers.”
Abdullah Hasan, a White House spokesman, provided a statement to FOX Business on Tuesday.
“It’s riches coming from an industry that uses its record profits to line shareholders’ pockets instead of increasing production and refining capacity so families can pay less for gas,” he said.
Hasan, echoing parts of Biden’s comments on Monday, said that “six of the largest oil companies took in over $100 billion in profits just in the last six months,” before going on to say that they spent over $50 billion of that on dividends and buyback of shares.
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“Of course they want to continue to make money in a time of war with impunity,” he continued. “But the president has been clear: if they don’t change their behavior, he will hold them accountable to protect the interests of American families.”
Biden said Monday that people would “hear more” about the issue “when Congress comes back.”
At press time, the national average price for regular gas was $3,758, compared with $3,800 a month ago and $3,402 a year ago, according to AAA. In mid-June, AAA reported that the national average price for regular unleaded gas reached a record high of $5.016.