US President Joe Biden plans to seek tax penalties for oil companies unless they invest their record profits in lowering household costs and ramping up production, a White House official said Monday.
The comments come days after US oil giants ExxonMobil and Chevron reported bumper earnings, reflecting how a surge in crude prices after Russia’s invasion of Ukraine has boosted the industry.
Natural gas costs have also risen, due to Europe’s mobilization to offset lost imports from Russia.
On Monday, an official said Biden would renew his appeal to both oil and gas firms, and that unless they comply “he will call on Congress to consider requiring oil companies to pay tax penalties and face other restrictions.”
Biden is expected to speak at 2030 GMT on Monday, in response to reports of major oil companies making record profits “even as they refuse to help lower prices at the pump,” according to a schedule published by the White House.
Beyond international developments, the energy sector has seen heightened refining margins, in part due to operational issues at some plants.
The strong margins have translated into higher gasoline prices, a sensitive issue for American voters as the November 8 midterm elections draw close.
On Saturday, Biden tweeted that oil companies made billions in profits this quarter and were “using these record profits to pay out their wealthy shareholders instead of investing in production and lowering costs for Americans.”
“It’s unacceptable,” he wrote, adding that it was time for oil giants to help lower prices for consumers.
American families have been squeezed by pesistently high inflation, propelling the issue to the top among voter concerns.
In the third quarter, ExxonMobil scored a near tripling of profits to $19.7 billion, a company record, while Chevron profits surged 84 percent to $11.2 billion.
ExxonMobil Chief Executive Daren Woods, in response to criticism that the industry should return profits to Americans, said on Friday that this was what it was doing in the form of its quarterly dividend.
But this drew a response from Biden, who said in a tweet that “giving profits to shareholders is not the same as bringing prices down for American families.”
Frustration and anger with negative economic issues like rising inflation is often directed at the president and the party in power.
Average prices at US pumps topped $5 per gallon in June, hitting an all-time high.