Biden warns energy companies against 'war profiteering' and threatens windfall tax

US president continues to assert pressure on companies to lower petrol prices

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US President Joe Biden on Monday raised the possibility of a “windfall tax” on energy companies, as his administration aims to combat high petrol prices days before the midterm elections.

"I think their responsibility to act in the interest of their consumers, their community and their country to invest in America by increasing production and refining capacity," Mr Biden said.

"They have the opportunity to do that … lowering prices for consumers to the pump. You know, if they don't, they're going to pay a higher tax on their excess profits and face other restrictions.

"My team will work with Congress to look at these these options that are available to us and others. It's time for these companies to stop war profiteering and meet their responsibilities in this country."

High prices at the pump have exacerbated inflation and have taken a toll on Mr Biden's and the Democrats’ standing among voters.

And Russia's war on Ukraine has tightened energy markets since February.

"Their profits are a windfall of war," Mr Biden said.

Congress would have to approve any new taxes on energy producers, which would be a tall order in the current legislature, where the Democrats have narrow control of the House and Senate.

It would be even less likely should Republicans retake one or both chambers on November 8.

“Oil companies made billions in profits this quarter,” the US president tweeted on Saturday.

“They’re using these record profits to pay out their wealthy shareholders instead of investing in production and lowering costs for Americans.

"It’s unacceptable. It’s time for these companies to bring down prices at the pump.”

Last week, ExxonMobil broke records with its profits in the third quarter, reporting $19.66 billion in net income, and Chevron had $11.23bn in profits, almost reaching those attained in the prior quarter.

Americans have struggled with abnormally high petrol prices in recent months, paying more than $4.80 on average for a gallon of regular ($1.27 a litre) at the start of July, the AAA reported.

Although this is cheaper than many western nations, Americans are used to paying much less for petrol.

Prices have since fallen to $3.76 on average nationally, but the White House says they should be lower, given declines in global oil prices over the same period.

Mr Biden has been critical of energy companies' profits since at least June, when he complained publicly that: “Exxon made more money than God this year."

AP contributed to this report

Updated: November 01, 2022, 6:09 AM
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