Durbin Calls for Windfall Profits Tax in the Wake of Huge 1st Quarter Oil Company Profits

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Durbin Calls for Windfall Profits Tax in the Wake of Huge 1st Quarter Oil Company Profits

"This week across Illinois the average consumer paid a record $3.71 a gallon for gasoline, while oil companies raked in record profits," United States Senator Dick Durbin (D-IL) said at a news conference in Chicago today. The Senator called for a windfall profits tax to hold oil companies accountable for unconscionable price gouging and profit taking while struggling families are paying sky high prices at the pump.

"This has been a tough week for consumers, but it's been a great week for oil companies," said Durbin. On Monday, ConocoPhillips reported 2008 earnings for its 1st quarter are up 17%, hauling in more than $4 billion in profits in 3 months. Tuesday morning, BP announced that they made $7.6 billion in profits in the first quarter of 2008. And Royal Dutch Shell announced a $9.08 billion first quarter profit. Yesterday, ExxonMobil posted a 17% rise in first-quarter income - reporting a profit of $10.89 billion. And just this morning, Chevron reported $5.17 billion in profits for the first three months of this year.

"Oil companies have been making money hand over fist as oil prices have risen," said Durbin. Last year the big oil companies reported making $123.9 billion in profits, which is about $230,000 in profits per minute. This year, oil companies are on target to make even more money -- $270,000 per minute - if current trends hold. At the same time, American families are struggling. The average American household spent nearly 5 percent of its income on gasoline when the price per gallon of gas was only $1.51 in 2001. Now, Americans spend 10 percent of their income on gasoline.

"Profits for the five largest integrated oil companies have more than quadrupled in just six years, yet those profits are not being reinvested in infrastructure and increased production to ease rising prices, nor are they being used to make it easier for us to use alternative fuels in cars and trucks," said Durbin. "The oil companies seem to have little interest in making the investments that might eventually relieve consumers of the high prices they're facing at the pump."

Durbin said he and his colleagues have taken steps to stem rising gas prices, yet it's hard to imagine how to bring gas prices down in the short run and keep them down if the oil industry is determined to earn profits in the hundreds of billions of dollars again this year.

Last week, Durbin called on the Chairman of the Federal Trade Commission to launch an investigation of rising diesel and jet fuel prices. He has long been a proponent of strong fuel-economy standards for cars and helped the Senate pass standards that will reach 35 miles per gallon by 2020. He also supported efforts to reduce U.S. dependence of foreign oil by targeting the production of 36 million gallons of renewable transportation fuels by 2022 and joined 50 other Senators in urging President Bush to suspend filling the Strategic Petroleum Reserve for the remainder of 2008. For the long term, he supports expanding Research & Development for plug-in hybrid electric vehicles and other ways to reduce the demand for gas.

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