Increased Call for Higher Taxation Rises as Energy Giants Rake in Billions in Profit

UTC by Benjamin Godfrey · 3 min read
Increased Call for Higher Taxation Rises as Energy Giants Rake in Billions in Profit
Photo: Unsplash

The humongous earnings from these oil giants have been criticized by a lot of activists including Amnesty International and Global Witness. 

If any corporate entity has benefited from the ongoing war in Ukraine, then it will be the world’s 5 largest energy companies, fueling calls for higher taxation. These firms include Exxon Mobil Corp (NYSE: XOM), Chevron Corporation (NYSE: CVX), Shell PLC (LON: SHEL), TotalEnergies SE (EPA: TTE), and BP plc (NYSE: BP) all of whom saw their combined earnings rise close to $200 billion.

The war in Ukraine fueled by the full-scale invasion from Russia placed a strain on the global oil supply since both countries are major players. As a result, the top oil companies had to step up their activities in a bid to meet demand from consumers, particularly in the United States, the United Kingdom, and the European Union.

This stepped-up production and engagement were delivered at a very high cost that was transferred to the average consumer. The gains were encompassed and capped by Exxon Mobil reporting a profit of $56 billion, the highest ever recorded in the history of the Western oil ecosystem.

TotalEnergies recorded a profit bump of $36.2 billion in what appears as a 100% growth from the year-ago period. As Coinspeaker reported earlier, BP also recorded its biggest profit jump in more than 114 years as it posted $27.7 billion in profit for the 2022 fiscal year.

While the strain in the energy industry was a bane for consumers, it was notably a gain for these oil majors, a situation that has drawn intense criticism across the board. In his State of the Union address, United States President, Joe Biden hammered oil companies for making excessive gains at the expense of average Americans.

He raised the talk on the possibility of clawback some of the profits through taxation.

“You may have noticed that Big Oil just reported record profits,” US President Joe Biden said in his State of the Union address on Tuesday. “Last year, they made $200 billion in the midst of a global energy crisis. It’s outrageous.”

With plans to quadruple the tax rate, President Biden said these oil majors will still make a lot of profit.

Energy Giants Defends Earnings and Fights Taxation Calls

Besides President Biden, the humongous earnings from these oil giants have also been criticized by other activists including Amnesty International and Global Witness.

Amid the growing call for higher taxation, Executives from these energy giants have defended the earnings, saying it helps keep a stable investment environment.

“Ultimately, taxes are a matter for governments to decide on. We, of course, engage and provide perspectives and the key perspective that we try to provide is a context around the fact that companies like ourselves that need to invest multiple billion dollars to support the energy transition require a secure and stable investment climate,” Shell CEO Wael Sawan said in a recent statement.

While Shell’s previous earnings of $40 billion are its highest ever since the $28.4 billion it recorded back in 2008. With the threat to impose massive taxation, the earnings from these firms this year are still bedeviled by uncertainty.

Business News, Market News, News
Benjamin Godfrey

Benjamin Godfrey is a blockchain enthusiast and journalist who relishes writing about the real life applications of blockchain technology and innovations to drive general acceptance and worldwide integration of the emerging technology. His desire to educate people about cryptocurrencies inspires his contributions to renowned blockchain media and sites.

Related Articles