Oil industry profited €3 billion during war as people struggle to pay bills

Oil industry profited €3 billion during war as people struggle to pay bills
Credit: Belga

European oil companies have pocketed a total of €3.3 billion in extra revenue since Russia invaded Ukraine at the end of February, which resulted in them hiking up fuel prices.

While consumers are hit by unprecedented price hikes, the sector raked in an average of €107 million extra in daily revenues from ramped up prices in March alone, €94 million from the sale of diesel, and €13 million from petrol, new research commissioned by Greenpeace Central and Eastern Europe shows.

In Belgium, more than €2 million in profit was made every day in March, according to calculations, however, most profits were made in Germany, Austria and Italy, where the margins on petrol are the highest.

“While millions of Europeans struggle with sky-high fuel and energy costs, the oil industry is driving up prices to reel in record profits on the back of the war and the ongoing energy crisis," Klara Maria Schenk, climate and transport campaigner for Greenpeace Central Eastern Europe, said.

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Crude oil prices between January and March increased by about 19.38 cents/litre — a rise which, according to Schenk- "doesn’t justify price hikes along the supply chain and at the pump," as prices for diesel refinery products increased by 30-31 cents/litre and diesel at the filling station by 36.52 cents/litre.

"These substantial revenue margins clearly show how the oil industry has exploited the crisis by driving up prices along the supply chain, while their average cost base has not changed significantly," a statement from the NGO read.

Need for EU intervention

The European Commission, in light of the Russian invasion of Ukraine, already confirmed that Member States can consider taxing the windfall profits of the whole energy sector. However, according to Greenpeace, this mostly focuses on the gas and electricity market.

Researchers argued that their latest report "exposed the dire implications of Europe’s addiction to fossil fuel," while also calling on European governments to "stop the shameless profiteering from Ukraine’s suffering and impose taxes on these immoral profits."

It put forward a number of suggestions, including extending the Commission's guidance to Member States on imposing windfall taxes on the profits of the oil sector as well.

Additionally, it urged European leaders to tax "excessive crisis profits" and use these funds to help households with limited means meet their energy and transportation needs "where fossil free alternatives are not available," and to accelerate the transition to a mobility system that "serves the planet and people.”

Greenpeace also calls on the Commission to investigate the recent increase of diesel and refined gasoline and petrol prices across the EU.

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