by Payton Seppala ‘23
In 2022, oil companies reported record profits due to a combination of the sanctions over the Russian-Ukrainian war and the post-pandemic recovery economy. Chevron, ConocoPhillips, Exxon and Shell have made a combined $1 trillion in a year, prompting questions about the ethics of making so much money while the global population has suffered from record high gasoline and energy prices. Some jurisdictions such as the UK and the EU have placed an extra tax on oil companies this year and put the money towards mitigating the energy costs of their citizens, but Exxon sued to stop the taxes in December. Such a tax (called a windfall tax) is exactly what more governments should consider in response to the large oil company profits.
A windfall tax that returns money to the hands of the consumers allows the overall economy to begin to get back into shape and ensure that people can pay for still-high energy costs, especially in Europe where prices are greatly affected by the war in Ukraine. Normally a high profit is a sign of great success for a company, but in this case it was gained at the expense of consumers who paid for an overpriced product out of necessity rather than demand. The ethically right decision would be to give back to the community to help mitigate the dramatic rise in prices, rather than pocket the cash.