Big Oil Profiteering Is Driving Inflation
It’s rare for a majority of Americans to agree on much of anything these days, let alone 87% of the country to be on the same page. But that’s the level of unanimity when it comes to a topic on the mind of anyone who has filled up at the tank lately: the importance of cracking down on Big Oil price gouging.
According to a Hart Research Associates poll, a whopping 87% of voters support Congress taking action to stop gouging at the gas pump. A full 80% of voters want Congress to go even further and tax Big Oil’s windfall profits in order to send direct relief to Americans struggling with high prices.
With these sorts of poll numbers, advancing a bill to stop Big Oil profiteering should be a no-brainer for Democrats.
For many, it is. A number of different proposals for a windfall profits tax have picked up dozens of co-sponsors and supporters and both the House and Senate. Democratic leadership has already thrown its weight behind another set of bills that would empower the FTC to crack down on any illegal price gouging by oil companies.
But according to reporting in E&E News on Wednesday, some Democrats are now wavering in their support and using inflation-concerns as an argument against going after gouging. While few have come out explicitly against the legislation, their lack of support could result in another self-inflicted wound for Democrats as they head into a campaign season where gas prices will be at the forefront of many voters' minds.
The argument that cracking down on price gouging and getting relief to consumers would drive up inflation is especially specious because high gas prices are one of the primary drivers of inflationary pressures – and worse, because oil companies have been intentionally driving those prices up.
In their calls with investors and responses to federal regulators, oil and gas CEOs have been clear that it’s not a lack of infrastructure or restrictive policies that are holding back moves to increase production, it’s their own desires to boost returns for investors by increasing prices at the pump and on our home heating bills. Big Oil isn’t interested in lowering prices – it wants to keep taking advantage of the war in Ukraine to drive them up. “Whether it's $150 oil, $200 oil, or $100 oil, we're not going to change our growth plans,” Pioneer Chief Executive Officer Scott Sheffield told Bloomberg TV. Comments like those are common across the industry and they have an explicit purpose: to try and keep prices high by convincing forecasters a crunch will continue into the future.
There’s a word for this practice of limiting an essential good like energy during a time of crisis and war: profiteering. And the only way to deal with the problem is to tackle it head on. Increasing the power of the FTC to crack down on illegal price gouging, and putting a windfall tax on the overall profiteering the industry is engaging in, has the dual benefit of driving down prices by taking away the incentive to keep them high, as well as getting immediate relief to consumers who need it most.
Big Oil’s apologists and the Right will argue that sending more money to Americans to help offset the cost at the pump and on their home heating bills will also push up inflation, but that’s also absurd. High gas prices aren’t being caused by families having too much money to spend on gas, they’re happening because Big Oil companies are taking advantage of the war in Ukraine to make billions at the public’s expense. Giving a working mother a few hundred dollars so she can fill up her tank isn’t going to keep inflation high. Letting billionaire oil CEOs get away with price gouging is.
Democrats should ignore the industry’s false arguments and do what an overwhelming majority of voters support: stopping the oil profiteering, passing a Big Oil windfall profits tax, and getting on with the agenda of transitioning our country away from fossil fuels once and for all.
