The US group made a profit of 20 billion dollars in the third quarter alone.
(Photo: Reuters)
new York The largest US oil company Exxon Mobil is complaining to the European Court of Justice (ECJ) against the European Union’s (EU) excess profit tax. The tax is intended to oblige oil companies to give up part of the record profits they made thanks to the Russian invasion of Ukraine.
The EU wants to earn up to 25 billion euros from this in order to reduce energy costs for its citizens. The new tax is to apply from December 31st. It will place at least 33 percent on all gains that are more than 20 percent above the average between 2018 and 2021. Germany is hoping for up to three billion dollars from the new tax.
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The US group and other oil companies have made record profits this year due to sharp price increases and high demand. In its lawsuit, Exxon argues that the company invests billions in Europe and that the EU Commission did not have the right to decide on this extra tax.
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In the third quarter alone, Exxon made a profit of $20 billion. The criticized EU tax would cost the company two billion dollars, as Exxon calculated in November when presenting the quarterly results.
Biden criticizes oil companies as war profiteers
A spokesman for Exxon emphasized in an interview with the Handelsblatt that the company is aware of the difficult situation of families in Europe and that the group is working to increase energy supplies to Europe. Exxon has already invested three billion dollars in refineries in Europe over the past ten years.
The record daily wins aren’t there because they’re doing something innovative. US President Joe Biden
The lawsuit is directed “only against the counterproductive excess profit tax and not against other parts of the package to reduce energy prices,” said the Exxon spokesman. “This tax would undermine investor confidence, discourage investment and increase dependence on imported energy and fuel,” he argues.
However, the European Court of Justice has yet to accept the lawsuit. Not only in Europe has there been a lot of criticism of the record profits in the oil and gas industry. In the US, President Joe Biden has denounced the oil companies as “war profiteers”.
“The record daily gains aren’t there because they’re doing something innovative. Your profits are war profits, unexpected profits from a brutal conflict that is destroying Ukraine and affecting tens of millions of people on earth,” he criticized after the latest quarterly results, in which Chevron also posted a record profit of eleven billion dollars.
Biden called on the corporations to lower their prices “to act on behalf of their customers, their communities and their country”. He also threatened an excess profit tax: “If they don’t do that, they will pay higher taxes on their excess profits and experience other restrictions.”
So far, however, Biden has stuck to the threat, and it is unlikely that a Republican majority in the House of Representatives would approve a new anti-oil tax next year.
More: Interview with Exxon Mobil boss on the future of energy – Wind and solar alone are not enough.
