In March, gas prices hit record highs as the Russian invasion of Ukraine began to exert considerable pressure on international supply chains. Following the rapid rise in prices, inflation accelerated 1.2% in transport costs across the market increased.
In response to these increases, various members of Congress have introduced bills to send direct assistance to families to reduce gasoline costs. California Congressman Mike Thompson, with John Larson (CT-01) and Lauren Underwood (IL-14) released a proposal that would provide a $200 for $100 gas credit to eligible households that live in areas where the average price of a gallon of gas is above $4.00.
“Putin’s price hike is straining our economy, and I’m proud to work with Representatives Larson and Underwood to introduce this bill to provide middle class americans with monthly installments to facilitate financial burden of this global crisis“Thompson said.
At this point, the future of the bill is uncertain.
After the details of the proposal were made public, President Biden announced that the United States would act to have one million barrels of oil spilled of the country’s strategic reserves. The additional supply that flooded into the market helped drive down costs, supply chain disruptions occurr, crude oil prices started to rise again.
Who would qualify?
Besides the price requirement, single filers must earn less than $75,000 per year and those who are married must earn less than $150,000 to receive full benefits. Those who exceed these limits can still claim some benefits, but at $80,000 (single) and $160,000 (married), payments would be phased out.
Gas Profit Rebates
the Stop Gas Price Gouging Tax and Rebate Act, introduced by Congressman Peter DeFazio would implement “a windfall tax on excessive corporate profits and return the income to American consumers in the form of a tax refund”.
In the last quarter, all the major oil companies recorded strong profits, well above those seen during the same period last year. Companies understand BP ($4.6 billion), Chevron ($6.26 billion), Shell ($9.13 billion) and Exxon Mobile ($5.5 billion).
The capital gains realized by these companies in 2022 that exceed 110% of their last year average would be taxed at a rate of 50%. The bill would only apply to profits this year after speculation that many major oil companies are profiting from the market effects of Russia’s invasion of Ukraine. Funds collected by the IRS would be redistributed to taxpayers as a refund next year.
These companies claimed they were in trouble and asked the federal government to grant them more drilling permits to increase supply. However, the process by which a study is carried out to determine how much oil can be extracted in a certain area and building the infrastructure needed for extraction takes time. It is unlikely to be effective as a short-term political solution. Moreover, after last year’s strong earnings, many Democrats doubt these companies need the additional resources that the federal government could provide.