Obama Calls for End to Oil Company Subsidies

Posted March 29th, 2012 at 12:05 pm (UTC-5)
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U.S. President Barack Obama has called for an end to tax subsidies for oil companies, saying the firms are making record profits while Americans are struggling with rising fuel costs.

At the White House Thursday, the president said Congress can either vote to spend billions of dollars more on oil subsidies that keep the country “trapped in the past,” or it can end the subsidies so the nation can invest in its future.

He said the three biggest U.S. oil companies made more than $80 billion in profits last year.

“When the price of oil goes up, prices at the pump go up, and so do these companies' profits. In fact, one analysis shows that every time gas goes up by a penny, these companies usually pocket another $200 million in quarterly profits. Meanwhile, these companies pay a lower tax rate than most other companies on their investments – partly because we're giving them billions in tax giveaways every year.”

He called for investments in clean energy technologies, wind and solar power, biofuels, fuel-efficient vehicles and energy-efficient homes and buildings — instead of the tax breaks to the oil companies.

But prospects for a legislative repeal appear dim. Republicans say that too much government regulation has kept the fuel prices high. They also say that ending the subsidies would only further drive up prices and discourage spending on exploration.

The rising costs have hurt the popularity ratings of Mr. Obama, who is running for re-election.