Six countries, including Germany, want share of oil company’s excess profits

Six member states of the European Union (EU) have demanded a 'windfall tax' on oil companies, as their profits have increased significantly due to the Iran war.

The demand was made in a joint letter from the finance ministers of Germany, Italy, Austria, Poland, Portugal and Spain, which was sent to the Irish finance minister. 

Ireland, which currently holds the rotating presidency of the EU, has called for the issue to be on the agenda of EU finance ministers meeting in Dublin next month.

The draft letter, seen by AFP, said that oil companies' overall profits and margins on refined fuel products have risen more than the rise in crude prices, at a time when one of the biggest supply crunches in decades has emerged and people around the world are growing increasingly dissatisfied with the rising cost of living.

The six countries want to discuss creating a common framework for taxing excess profits across the EU, proposing to build on the experience of a temporary surcharge imposed on energy companies after Russia's invasion of Ukraine in 2022.

German Finance Minister Lars Klingbeil has also said that energy companies should not be allowed to make excessive profits from consumers during the crisis. A source in his ministry said that the excess profits made from the crisis should be returned to consumers.

But the EU has yet to decide on a new windfall tax on oil companies, and there are differences of opinion among member states. While Germany's ruling coalition partner, the Social Democratic Party (SPD), supports the proposal, Chancellor Friedrich Merz's Christian Democratic Union (CDU) is opposed.