Proposed Legislation Targets Oil Company Profits
By Mandy Kozar
WASHINGTON, Sept. 20 -In an attempt to provide relief to consumers hit by record-high gasoline prices and rising fuel costs – rates they said were the result of energy industry price gouging — Senators Christopher Dodd (D-CT) and Byron Dorgan (D-ND) proposed legislation Tuesday that would provide rebates to consumers while pressuring oil companies to lower prices.
“We’re convinced these are deliberate increases,” Dodd said at a press conference. Blaming the soaring prices entirely on Hurricane Katrina, he added, is “totally false.”
The proposed legislation would target the oil companies by imposing a 50 percent excise tax on the amount above $40 they charge for a barrel of crude oil. But any such profits that companies invest in such areas as energy research and building refineries would be excluded from the tax, which would then be returned to consumers in the form of a rebate.
Currently, crude oil is trading for slightly less than $70 a barrel. Dodd and Dorgan said the oil industry is gouging consumers and pocketing the record-breaking profits.
With winter just around the corner, Dodd said he was concerned with how residents of his state are going to cope with the soaring prices.
“Home heating oil in my area of the country may go up as much as 33 percent,” Dodd said.
Already some areas are anticipating the need to rethink their budgets for the winter. Although he said it was too soon to know for sure, Norwalk Public Schools Superintendent. Salvatore Corda said he expects that his district will feel the effects of the rising fuel prices.
“We budgeted with an anticipated price of $48 a barrel; it is now I believe $67. It would appear therefore that our budget appropriation would be short and we will need additional resources,” Corda said, “Whether we can meet that shortfall through existing budget lines or whether we will need to go through special appropriation remains to be seen. But I would expect that certainly that we are going to feel the pinch of that in some way.”
It is not considered likely that the GOP-controlled Senate will act on the legislation.
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