Six countries want EU talks in September on taxing windfall profits of oil companies

By Jan Strupczewski

BRUSSELS, Aug 24 (Reuters) – Six European Union countries want the 27-nation EU to discuss in September a mechanism to tax windfall profits of oil companies triggered by Iran’s blockade of the Strait of Hormuz, a letter by their finance ministers showed on Monday.

In a letter to Ireland, which holds the rotating presidency of the EU, Germany, Spain, Portugal, Italy, Poland and Austria are asking the presidency to put the issue on the agenda of the next EU finance ministers’ meeting in Dublin on September 18 to 19.

“We are experiencing one of the biggest supply shocks in decades, and all over the world there is growing discontent about the rise in the cost of living,” the six finance ministers wrote in the letter, seen by Reuters. 

“Government measures taken so far have not been sufficient to reduce or stabilise prices for businesses and citizens on a permanent basis. This is why we need a common approach, one that ensures that those who are profiting from the crisis do their part to ease the burden on the general public,” they said.

Oil prices have risen about 25% from levels at the outbreak of the U.S.-Israeli war on Iran on February 28, while prices of refined products surged more – European diesel prices rose more than 70% since the war began, while gasoline prices have climbed around 20%.

“To this end, we need to address the matter of high energy prices by discussing an EU-wide framework to tax windfall profits, taking into account lessons learned in 2022, this time with a more specific analysis of how the foreign profits of multinational oil companies can be included in a more targeted way,” the letter said.

The ministers also said they wanted to see the results of a European investigation into refiners’ margins as soon as possible, to make sure that refineries are not taking advantage of the current energy price spike.

(Reporting by Jan Strupczewski, Editing by Louise Heavens)