UFC-Que Choisir calls on parliamentarians to vote for the establishment of an exceptional tax of 5 billion euros on the profits of the oil group Total.
The Total group will achieve more than 13 billion euros in net profit this year against an annual average of 5 to 6 billion. The constitution of these exceptional profits comes from a singular economic model to say the least: the oil groups align their upstream and downstream margins with the level of the price of the crude barrel. Consequently, the spike in oil mechanically leads to an explosion in the profits of the oil groups.
UFC-Que Choisir has calculated that, compared to a normal profitability of 15%, Total's excess profits reach 4 billion euros in 2004 and 7 billion in 2005. It also appears that the capital employed for Total's activity have decreased slightly over the past two years, which reinforces the artificial nature of these extra profits. The absence of competition from the sector therefore allows the oil group to constitute a historic rent to the detriment of consumers' purchasing power.
The UFC-Que Choisir asks that, during the next amending finance law, parliamentarians follow the example of Great Britain which has just doubled the taxation of oil profits from the North Sea. The British finance minister very simply justified this measure by saying that "the balance must be balanced between consumers who pay for gasoline or heating and [oil] producers". This levy will also encourage the oil groups to revise their pricing policy downwards by calculating their profits on rational and objective bases, such as productivity and the level of investments.
UFC-Que Choisir proposes two measures to ensure that this exceptional tax is redistributed for the benefit of the consumer and the promotion of sustainable development:
- a structural measure to reduce dependence on oil: 3,7 billion euros must be devoted to investment in the local public transport network which could then grow by 25% per year for five years. The objective of this measure is to increase the frequency of services and the density of the network so that the journey time by public transport is no longer systematically greater than that of automobile travel.
- a measure for purchasing power: grant one month of free local public transport everywhere in France in order to cushion the impact of the increase in gasoline borne in 2005 by consumers.
source: What to choose
Rulian's note: the UFC has it all down the line: tax the oil “surplus profits” and reinvest everything in public transport. Well done.