Tuesday, June 10, 2008
Republican Senators nix oil company windfall profits tax for now; consumers show concern about possible rationing
A measure to tax “windfall profits” of oil companies failed in the Senate today by a vote of 51-43. 60 votes were needed to pass the measure. As a general matter, Republicans claimed that the measure did nothing to encourage production of more crude oil or other fuels or, for that matter, alternative clean renewable energy.
The bill would have placed a 25% tax on some oil company profits.
Also, CNN is reporting that consumers are becoming concerned about the possibility of long gasoline station lines and rationing. In 1973-1974, gasoline stations were closed on Sundays by President Nixon’s order for about four months until the Arab oil embargo was lifted. In many areas, motorists were forced to accept “even-odd” rationing by license plates last digits. So far the administration and Congress have said little about this prospect this time, but the idea would come up if there were a major Al Qaeda attack on mid-Eastern oil fields. Rebels in Nigeria and political turmoil in Venezuela also seriously affect supply and crude oil futures price.
Democrats and some Republicans are suggesting greater regulation of oil futures trading, perhaps with more margin requirements or more connection to actual oil delivery.
The CNN story is “GOP senators spike windfall profits tax on big oil,” link here.
Barack Obama has suggested that a gax tax holiday for consumers is largely a gimmick of very little financial value to consumers, but seems interested in proposing another tax rebate later this year. Hillary Clinton had wanted oil companies to pay consumers' gasoline taxes out of profits.
There were major media reports today that Saudi Arabia made a small increase in oil production, and is calling a meeting to discuss supplies and prices.