Stop the Windfall Profits of Fossil Fuel Companies

The war waged by the United States and Israel against Iran has created turmoil in global energy and stock markets and driven oil prices sharply upward after Iran closed the Strait of Hormuz to ships from countries it considers hostile.


About a month ago, long queues formed at gas stations when the Danish People’s Party staged an election stunt by offering cheap gasoline at selected stations. The stunt— which was not without impact on the election results— struck directly at a major problem facing many Danes, especially in areas outside the larger cities, where public transport has been neglected for years, in fact for decades.

How are we to afford transportation to and from work, take our children to daycare, and get to the supermarket when gasoline and diesel prices are soaring?

The unlawful war by the United States and Israel against Iran, and the struggle over the Strait of Hormuz, have significantly driven up oil and gas prices. The war, which has disrupted large parts of oil and gas transport through the strait, has also been felt here at home. In January, a liter of gasoline cost 14.50 kroner at the pump. Since then, it has risen to as much as 17.50 kroner, and currently fluctuates between 15.00 and 16.00 kroner.

A truly socially sustainable and responsible green transition must shift the burden upward, not downward.

In a few weeks, the controversial food allowance will be paid into the accounts of several hundred thousand Danes as a small compensation for the soaring prices of food. It is a tiny and very delayed remedy. Even before it has been paid out, fuel prices have now become the central issue. They mean higher costs for gasoline and energy— and these increases will in turn lead to rising food prices of between 5 and 10 percent.

According to Denmark’s EU Energy Commissioner, Dan Jørgensen, it is up to each individual Dane to get out of this situation. Work from home and lower your heating, he says in an interview with Altinget, claiming it will have a “very, very large effect,” thereby placing the responsibility back on individuals.

Dan Jørgensen continues:

“It is not the case that we here in Brussels are trying to micromanage what people do in their daily lives. But at the same time, if we look at what actually worked during the energy crisis in 2022, it was that energy consumption was reduced quite significantly […] It may sound like a small thing that we are now recommending more virtual meetings, but clearly, if we soon find ourselves lacking fuel for flights…”

In several European countries, protests have already taken place. In Ireland, demonstrations and blockades have been intense, and similar actions have occurred in Norway. There have also been protests in Brussels, and some EU countries have adopted packages and tax reductions aimed at lowering energy prices.

The cost of importing fossil fuels into the EU has increased by 3.7 billion kroner per day since the war against Iran began. This is not due to an increase in import volumes, but solely due to price increases.

This means that “some” are making enormous profits. And these “some” appear to be allowed to continue doing so. Yet this is not a reality that Dan Jørgensen acknowledges:

“We are not in a situation where there are abnormal profits in the system right now,” he says.

Either the Energy Commissioner is speaking against better knowledge, or he is deliberately turning a blind eye. A Greenpeace-sponsored analysis shows that major oil corporations in the EU are collectively earning an additional €81.4 million per day in profits due to the sharply increased fuel prices resulting from the war by the United States and Israel against Iran. These profits have risen far more than the underlying increase in crude oil prices.

It therefore makes perfect sense to immediately introduce a cap on these excess profits and to tax the fossil fuel multinationals. The billions generated could then be used to finance reductions in costs for ordinary people, for example through tax relief.

This will be urgently needed. Crises are piling up, and various costs are already being passed downward. The private-sector agreements concluded last year, and the public-sector agreements underway, do not guarantee real wage protection in the years ahead.

Measures against windfall profits could also be used to accelerate investment in low-cost renewable energy sources and ensure a genuine green transition. This is, of course, the way forward. But it is not an immediate solution for low-wage workers and people on social benefits who cannot afford to replace their old gasoline cars with electric vehicles.

A truly socially sustainable and responsible green transition must shift the burden upward, not downward.


https://arbejderen.dk/leder/tag-superprofitterne-fra-de-fossile-selskaber/

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