US Senate Democrats eye windfall profits tax on oil companies

Washington (Platts)--23Aug2005

With US gasoline and crude oil prices at or near record levels, several 
Senate Democrats are looking at the possibility of imposing windfall taxes on
oil companies.
     US Senator Carl Levin (Democrat-Michigan) urged President Bush in a
letter sent Monday to tell oil companies to lower prices or face windfall
profit taxes, his office said Tuesday.
     "I urge you to call the major oil companies into the White House, and to
tell them in a clear and forceful way that, if they do not act immediately to
bring down oil prices, you will support an excess profits tax," Levin wrote.
      Levin also requested that Bush tell oil companies that he would ask the
Federal Trade Commission and Department of Justice to investigate recent steep
price increases to determine if any existing laws have been violated. 
     Meanwhile, Senator Byron Dorgan (Democrat-North Dakota) last week
introduced a bill to impose a windfall profits tax on major oil companies,
which he said are reaping an extra $7-bil in profits each month because of
strong oil prices. "These biggest oil companies stand to gain up to $80-bil in
the next year in windfall profits," Dorgan said in a statement.
    "This has nothing to do with a free market," Dorgan maintained. "It is
about the OPEC countries and the major oil companies profiting in a controlled
market that rewards then and penalizes our consumers."
     Dorgan's bill provides an exemption for companies that use their profits
to directly invest in new oil and gas exploration and increase refining
capacity. Revenue from the tax would be used to provide rebates to consumers
who are paying "inflated prices for gas and oil products," Dorgan said. 
     Also last week, Senate Minority Leader Harry Reid (Democrat-Nevada),
Assistant Democratic Leader Dick Durbin (Democrat-Illinois) and Sen. Maria
Cantwell (Democrat-Washington) set a letter to Bush demanding "immediate
presidential leadership" to address rising crude and gasoline prices. 
     They suggested that Bush direct the FTC, in consultation with
the Department of Energy, to issue regulations requiring full disclosure by
refiners and distributors of their wholesale motor fuel pricing policies, with
a separate listing for each component contributing to prices, including the
cost of crude oil, refining, transportation, overhead and profits.
     The three Democrats also requested that Bush direct the FTC to
investigate the retail prices of gasoline in any state where the average price
of regular-grade increases by 20% or more for a period of at least seven days
during any three-month period to see if the price is being artificially
manipulated by reducing refining capacity or by any form of manipulation.
     They also called on Bush to order the FTC, DOJ and the Commodity Futures
Trading Commission to "exercise vigorous oversight over the oil markets" to
protect Americans from price gouging or unfair practices at the gas pump.
     The US Energy Information Administration Monday reported that US
regular-grade gasoline prices jumped 6.2 cts to a nationwide average of
$2.612/gal for the survey week ended Monday, an all-time high on a
non-inflation adjusted basis.

For more information, take a trial to Platts Inside Energy at
http://insideenergy.platts.com.

Please visit: www.platts.com

Their coverage of energy matters is extensive!!.