Ramos Legislation Puts the Brakes on ‘Big Oil’s’ Runaway Profiteering

June 22, 2008
Assemblyman Philip Ramos (D-Central Islip) announced the Assembly passed a package of energy-related bills designed to offset steadily rising and historically high fuel costs.

“High gas prices are hurting working families in Suffolk,” Ramos said. “We need real action. And since President Bush has failed to act and let residents continue to suffer, New York must do what we can to provide relief.”

Forcing major oil companies to pay up

In 2006, Ramos sponsored the law which capped the state sales tax on gasoline– but the savings never trickled down to consumers. While motorists continued to empty their pockets, ‘Big Oil’ posted record-high profits in 2007.

“Big Oil has been taking advantage of working families and lining their pockets with our hard-earned dollars,” Ramos said. “And all the while George Bush has let it happen. It’s time we stood up to Big Oil and took real action to stop the pain at the pump.”

The Assembly introduced legislation instituting a recapture and windfall-profit tax provision on “Big Oil” companies with a prohibition on passing the tax on to consumers (A.11590). The revenues would go to a fund that supports energy-savings measures for consumers as well as helping pay home heating bills this winter through the Home Energy Assistance Program (HEAP). The legislation:

  • requires gasoline importers to pay a surcharge equal to 4 percent of the difference between the price of a gallon of gasoline and $2 per gallon; and
  • prohibits the pass-through of this surcharge to consumers and provides for a civil penalty of up to $35,000 per day for any violation of this prohibition.

Based on the forecasted price for gasoline by the Energy Information Association, the recapture provision on “Big Oil” would be expected to generate $406 million. The windfall-profit tax would:

  • impose a 2 percent gross-receipts tax on very large oil companies that sell their products in New York State; and
  • prohibit big oil companies from passing along the additional costs to customers through increases in the price of gasoline.

Based on the forecasted price for gasoline by the Energy Information Association, the windfall-profit tax would be expected to generate $464 million. The additional revenue generated by the recapture and windfall-profit tax would be dedicated to enhancing the state’s Home Energy Assistance Program (HEAP) so that more New Yorkers will be eligible, and for energy conservation programs.

According to the Office of Temporary Disability Assistance, the average HEAP grant is $350 and eligible families can receive two grants per season – an initial grant and one emergency grant. Ramos added that with oil at over $135 per barrel and rising to all-time record highs, seniors and working families will need added assistance to deal with skyrocketing home-heating costs this winter and this effort will help.

Pushing for a national energy policy to combat the Bush Administration failures

The Assembly also introduced resolutions calling for a federal solution to end price-gouging by companies that produce crude oil, gasoline, natural gas and all petroleum distillates. The resolution urges Congress to:

  • create an excess-profits tax for companies that engage in gouging (K.1987);
  • establish additional consumer tax credits to stimulate the creation of innovative, renewable energy technologies (K.1987); and
  • provide additional funding for the Low Income HEAP to better serve the families that rely on the program to help meet their energy needs (K.1986).

“The failure of President Bush to enact a comprehensive energy policy is hurting working families,” Ramos said. “Instead of looking out for hard-working residents, George Bush is allowing his Big Oil buddies to rake in record profits and that’s wrong.”