By Nneka Nwogwugwu
A draft by the European Union has showed on Monday that fossil fuel firms may have to share their excess profits to help European households and industries cope with red-hot energy bills.
Energy prices and inflation have surged as Moscow slashed gas supplies in response to Western sanctions imposed over its actions in Ukraine, prompting France to tell consumers they would have to share some of the pain while Britain is among countries facing the threat of recession.
The draft European Commission proposal, which is expected to be unveiled this week, would see the 27 EU countries introduce a ‘solidarity contribution’ for the fossil fuel industry.
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Oil, gas, coal and refining companies would have to make a financial contribution based on taxable surplus profits made in the 2022 fiscal year, according to the draft, which could still change and will then need to be approved by EU governments.
“Those profits do not correspond to any regular profit that these entities would or could have expected to obtain in normal circumstances,” the draft EU plan, seen by Reuters, said.
BP (BP.L) and Shell (SHEL.L) had no immediate comment. TotalEnergies (TTEF.PA) did not immediately respond to a request for comment.
The proposals are also expected to include a life-raft for power firms facing a liquidity crunch. But countries are split over the details and whether to impose a cap on the price they pay for gas, diplomats said.
