Amid High Gas Prices, Padilla Working to Curb Big Oil Profiteering and Provide Consumers Relief
Big Oil Windfall Profits Tax Act would protect consumers from giant oil companies taking advantage of world events to jack up prices
WASHINGTON, D.C. — Amid skyrocketing gas prices in California and across the country, U.S. Senator Alex Padilla (D-Calif.) today cosponsored legislation to curb big oil companies taking advantage of Americans at the gas pump and help provide relief for consumers. The Big Oil Windfall Profits Tax Act would require large oil companies that produce or import at least 300,000 barrels of oil per day to pay a per-barrel tax equal to 50 percent of the difference between the current price of a barrel of oil and the pre-pandemic average price per barrel, a period when big oil companies were already earning large profits.
Revenue raised from the windfall profits of big oil companies will be returned to consumers in the form of a quarterly rebate, which would phase out for single filers who earn more than $75,000 in annual income and joint filers who earn more than $150,000. At $120 per barrel of oil, the levy would raise approximately $45 billion per year. At that price, single filers would receive approximately $240 each year and joint filers would receive roughly $360 each year.
“It is wholly unacceptable that while the price of oil is going down, prices at the pump remain at an all-time high,” said Senator Alex Padilla. “Big oil companies are taking advantage of world events and lining their pockets while Californians and working families across the country pay the price—we cannot allow them to continue to manipulate prices. This bill will hold big oil companies accountable and deliver much-needed relief to the American people.”
This week, the average price for a gallon of gasoline in California reached $5.75. Nationally, the price of a gallon of gasoline is up well over a dollar from a year ago, and the price of a barrel of oil is double what it was before the pandemic. Russia’s invasion of Ukraine has further disrupted an already volatile global oil market by reducing supply and leading governments to limit imports of Russian energy to help protect the Ukrainian people.
The Big Oil Windfall Profits Tax would provide consumers guaranteed relief while maintaining American competitiveness and reducing pressure on inflation by attacking corporate profiteering. The quarterly tax will apply to both domestically produced and imported barrels of oil to ensure a level playing field.
Smaller companies accounting for roughly 70 percent of the domestic production will be exempt, so oil giants cannot simply gouge consumers further without the threat of losing market share.