James Packard
Biden accuses Big Oil of war profiteering, weighs consequences
The president is considering asking Congress to levy tax penalties on oil companies if they don't re-invest profits into lowering costs for Americans.
LEARN MOREPosted: 9:29 a.m. EST Feb 23, 2023
California Gov. Gavin Newsom got aggressive with Big Oil, pushing a plan to tax oil companies for profits over a certain amount and refund Californians for those price hikes.
"Big oil has been screwing you," he said.
At a hearing Wednesday, California Energy Commission Vice Chair Siva Gunda argued oil companies — which logged record profits last fall — cashed in on higher oil prices but kept gas prices high for consumers, even as oil costs fell, raking in the money as drivers struggled to pay the bills.
"To date, we have not received any information disagreeing that the last fall was very profitable for the oil industry in California," Gunda said.
"They charged Californians record-high gas prices in 2022, peaking at $6.42 per gallon," Newsom said. "By the way, that was despite the fact — get this — despite the fact that the cost of crude went down at the same time. And there was zero — no increases — in state taxes, regulations or any fees during that time."
The big oil companies argue California's higher standards for oil refining intended to limit carbon emissions are more expensive to meet. And even some Democrats in Sacramento understand the concerns.
Still, California's demand for gas is falling as more drivers buy electric vehicles and fuel efficiency improves.
"California has likely passed its peak gas consumption levels," Gunda said.
Now, the legislative committee that is tasked with crafting a new law is trying to figure out how much to charge companies for excess profits and who would get a refund.
"There would be no cap at all on normal profits," Gunda said. "The penalty would start only after refiners have been allowed to earn a healthy profit on each gallon sold."
It's an attempt to share the profit pie with drivers when gas prices soar.
