One expert said a windfall tax could deter new investment in domestic oil production and impact the U.S. relationship with the world oil market.
over gas prices and inflation. Biden has sought to alleviate gas prices by releasing millions of barrels from the Strategic Petroleum Reserve, though gas prices are generally determined by global factors.
President Joe Biden speaks during a press conference in which he called on oil companies to stop “war profiteering,” warning they could face higher taxes on their record profits. Experts warned that while such a tax may have societal benefits, it could backfire on him in terms of gas prices.Experts warned Biden's latest plan to lower gas prices could backfire.
Boston University professor Cutler Cleveland, who serves as the associate director of the Institute for Sustainable Energy, tolda windfall tax would likely be perceived by oil companies as an increase in the cost in producing oil and could lead to reduced domestic production of oil. This could add"upward pressure" on gas prices.
"There's no plausible arrow you can draw from a windfall profits tax and lower gasoline prices," Cleveland said.:"This is an extremely bad idea that will nearly guarantee to result in curbed desire to increase capacity in oil production and refining capacity and result in even higher prices in the years ahead."
this is an extremely bad idea that will nearly guarantee to result in curbed desire to increase capacity in oil production and refining capacity and result in even higher prices in the years ahead.
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