Oil industry reacts to Biden threatening potential windfall tax

Oil industry groups are reacting to President Joe Biden on Monday threatening a potential windfall profit tax or other repercussions if oil companies don’t invest in increasing U.S. production and lowering consumer prices.

The president, arguing in remarks Monday that oil companies’ recent profits were a "windfall of war" in Ukraine, urged them to direct some profits to boosting their U.S. production and refining capacity and to lowering gas prices Americans are seeing at the pump. He said he thinks they have a "responsibility to act in the interest of their consumers, their community and their country."

BIDEN SLAMS OIL COMPANY PROFITS, THREATENS WINDFALL TAXES AS PENALTY

"If they don’t, they’re going to pay a higher tax on their excess profits and face other restrictions," Biden said. "My team will work with Congress to look at these options that are available to us and others. It’s time for these companies to stop war profiteering."

In a statement Monday, American Petroleum Institute (API) President and CEO Mike Sommers said American families and businesses "are looking to lawmakers for solutions, not campaign rhetoric."

Sommers also accused the Biden administration of taking credit "for every cent of decreases in gasoline prices, but when prices go the other way, the finger pointing begins" in a call with reporters Tuesday morning. 

He argued "increasing taxes on American energy discourages investment in new production" in both the statement and the call with reporters, stating that global markets determine gasoline prices. He also told reporters "bad policies matter."

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While appearing on "Kudlow" in the afternoon, Sommers pushed back on Biden's "war profiteering" comment.

"The accusation that they made on this industry — an industry by the way that self-sanctioned and refused to take any more Russian crude at the beginning of this terrible war going on in Europe, an industry that withdrew on its own from Russia without bandaids from the federal government – for them to be saying that this industry, the most patriotic industry that I know in our country, would be war profiteering is an absolutely outrageous comment," he said.

Chet Thompson, the CEO and president of the American Fuel and Petrochemical Manufacturers, accused Biden of being "more worried about political posturing" ahead of the midterms than "advancing energy policies that will actually deliver for the American people."

"A windfall profit tax might make for good soundbites, but as policy, it’s bad for consumers," he said in a statement. "It’s likely to disincentivize fuel production and make matters worse for drivers."

Abdullah Hasan, a spokesperson for the White House, provided a statement to FOX Business on Tuesday.

"That’s rich coming from an industry that’s using its record profits to pad shareholders’ pockets instead of boosting production and refining capacity so that families can pay less for gas," he said.

Hasan, echoing part of Biden’s comments Monday, said "six of the largest oil companies raked in over $100 billion in profit over the last six months alone," before going on to say they spent over $50 billion of it on dividends and stock buybacks.

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"Of course they want to keep profiteering off a time of war with impunity," he continued. "But the president has been clear: if they don’t change their behavior, he will hold them accountable to protect the interests of American families."

Biden said Monday people would "hear more" on the matter "when Congress gets back."

At the time of publication, the national average price for regular-grade gas was $3.758, compared to $3.800 a month ago and $3.402 a year ago, according to AAA. In-mid June, AAA reported the national average price for regular unleaded gas reached a record-high $5.016.