Big oil could bring US gas prices down but won’t – so hit it with a windfall tax
This morning I filled my car with gas, costing almost six dollars a gallon. My car is a Mini Cooper I bought years ago, partly because it wasn’t a gas-guzzler. Now it’s guzzling dollars.
When I consider what’s happening in Ukraine, I say what the hell. It’s a small sacrifice.
Yet guess who’s making no sacrifice at all – in fact, who’s reaping a giant windfall from this crisis?
Big oil has hit a gusher. Even before Vladimir Putin’s war, oil prices had begun to rise due to the recovery in global demand and tight inventories.
Last year, when Americans were already struggling to pay their heating bills and fill up their gas tanks, the biggest oil companies (Shell, Chevron, BP, and Exxon) posted profits totaling $75bn. This year, courtesy of Putin, big oil is on the way to a far bigger bonanza.
How are the oil companies using this windfall? I can assure you they’re not investing in renewables. They’re not even increasing oil production.
As Chevron’s top executive, Mike Wirth, said in September, “We could afford to invest more” but “the equity market is not sending a signal that says they think we ought to be doing that.”
Translated: Wall Street says the way to maximize profits is to limit supply and push up prices instead.
So they’re buying back their own stock in order to give their stock prices even more of a boost. Last year they spent $38bn on stock buybacks – their biggest buyback spending spree since 2008. This year, thanks largely to Putin, the oil giants are planning to buy back at least $22bn more.
Make no mistake. This is a direct redistribution from consumers who are paying through the nose at the gas pump to big oil’s investors and top executives (whose compensation packages are larded with shares of stock and stock
Read more on theguardian.com
