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Gas price in the United States

Over the weekend, the average price of gas hit $5 a gallon across the country — a near record high. Energy costs rose by 3.9 percent from April to May, and have spiked by 35 percent since this time last year.



Meanwhile, oil and gas giants are raking in record profits thanks to these soaring prices at the pump. In the first quarter of 2022, Chevron’s profit more than quadrupled and ExxonMobil’s profits more than doubled, despite the latter taking a $3.4 billion hit for exiting its business in Russia. ExxonMobil will use these sky-high profits not to ease the burden on consumers at the gas pump, but to increase its stock buybacks. The oil giant now plans to buy back $30 billion of its own stock, up from the $10 billion it announced earlier this year.



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 options).

Big oil companies could absorb the higher costs of crude oil. The reason they’re not is because they’re so big they don’t have to. They don’t worry about losing market share to competitors. So they’re passing on the higher costs to consumers in the form of higher prices, and pocketing record profits.

What to do? Hit them with a windfall profits tax. Britain’s Conservative government just did it: they enacted a 25 percent windfall tax on oil and gas companies that will be used to distribute $19 billion in assistance to low-income households struggling to cover higher costs of living. If Britain’s Conservatives can do it, so can Biden and the Democrats.

What do you think?



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