Washington, D.C. – With gas prices rising in recent days against a backdrop of continued Russian aggression in Ukraine, Colorado U.S. Senator Michael Bennet joined U.S. Senator Sheldon Whitehouse (D-R.I.) and several colleagues to introduce the Big Oil Windfall Profits Tax, legislation to curb profiteering by large oil companies and provide Coloradans relief at the gas pump.  

“We need to use every tool at our disposal to protect Coloradans from rising energy costs and provide them relief, and this legislation will help us do that,” said Bennet.  “As Putin wages a reprehensible, lawless war on Ukraine and sends the global energy market into chaos, we need to hold large oil and gas companies accountable and prevent them from using this moment to exploit American consumers. We also urgently need to invest in America’s clean energy economy to cut costs for families and strengthen our energy independence, which we can do by passing the extension and expansion of the clean energy tax credits included in the Finance Committee’s budget package.”

The price of a gallon of gasoline is up well over a dollar from a year ago, and the price of a barrel of oil is double what it was before the pandemic. Russia’s invasion of Ukraine has further disrupted an already volatile global oil market by reducing supply and leading governments to limit imports of Russian energy to help protect the Ukrainian people.

At the same time, big oil companies are reaping near-record profits. In 2021, ExxonMobil’s profits jumped over 60 percent over pre-pandemic levels to more than $23 billion. Over that same time period, the price of a gallon of gasoline rose from an average of $2.69 to $3.41. It currently stands at over $4. 

The Big Oil Windfall Profits Tax would provide consumers guaranteed relief while maintaining American competitiveness and reducing inflationary pressures by attacking corporate profiteering. Under this bill, large oil companies that produce or import at least 300,000 barrels of oil per day (or did so in 2019) will owe a per-barrel tax equal to 50 percent of the difference between the current price of a barrel of oil and the pre-pandemic average price per barrel between 2015 and 2019, a period when big oil companies were already earning large profits. The quarterly tax will apply to both domestically produced and imported barrels of oil to ensure a level playing field. 

Smaller companies accounting for roughly 70 percent of oil domestic production will be exempt, so oil giants like Exxon Mobil and Chevron cannot simply gouge consumers further without the threat of losing market share.

Revenue raised from taxing the windfall profits of big oil companies will be returned to consumers in the form of a quarterly rebate. At $120 per barrel of oil, the tax would raise approximately $45 billion per year. At that price, single filers would receive approximately $240 each year and joint filers would receive roughly $360 each year. Rebates would phase out for single filers who earn more than $75,000 in annual income and joint filers who earn more than $150,000.

In addition to Bennet and Whitehouse, this legislation is co-sponsored by U.S. Senators Jeff Merkley (D-Ore.), Elizabeth Warren (D-Mass.), Bernie Sanders (I-Vt.), Richard Blumenthal (D-Conn.), Tammy Baldwin (D-Wis.), Sherrod Brown (D-Ohio), Jack Reed (D-R.I.), Ed Markey (D-Mass.), Cory Booker (D-N.J.), and Bob Casey (D-Pa.).