UN chief pushes windfall tax to ease high prices

Wealthy countries should tax the windfall profits of fossil fuel companies and use the revenue to help those struggling with spiking prices, UN secretary-general Antonio Guterres said.

The war in Ukraine has accelerated a cost-of-living crisis and created a "perfect storm" of soaring food and energy prices, spiraling inflation, crushing debt load and higher risk of social unrest, Guterres said today at the start of the UN General Assembly meeting in New York.

"A winter of global discontent is on the horizon," Guterres said.

Developed economies could ease some of those problems by putting a windfall profits tax on fossil fuel companies that are "feasting" on hundreds of billions of dollars in subsidies while household budgets shrink, Guterres said. Tax revenue should be redirected to countries suffering from climate-related damage and to people struggling with high food and energy prices, he said.

"It is high time to put fossil fuel producers, investors and enablers on notice," he said. "Polluters must pay."

Guterres last month similarly pushed for a windfall profit tax on fossil fuel companies. He said their surge in profits was "immoral" and was punishing the poorest and most vulnerable.

The UK, Italy and Romania have announced windfall taxes on energy companies in response to high prices, and the European Commission has endorsed the idea. But the idea has triggered opposition from some countries that see it as a threat to their future growth.

Growing producer Guyana has rejected calls for the imposition of a windfall tax on oil companies. Guyana will not take instructions on how to manage its oil industry from those who disapprove of its plans to exploit and monetize its resources, vice president Bharrat Jagdeo said.

"We will not impose a windfall tax," he said.

The new South American oil producer plans to exploit its hydrocarbon resources as quickly as possible and is seeking new companies to join a consortia led by ExxonMobil, which started production in 2019. ExxonMobil is producing 372,000 b/d from two projects on the deepwater Stabroek block and has forecast output of 1.2mn b/d by 2027 after more projects are commissioned on the block.

By Chris Knight and Canute James