Only in the last two months, Texas has collected $1 billion in taxes from the oil and gas companies in the state. This is almost 46% more than what the companies paid in 2021, according to the Dallas Morning News.
Although the millions in taxes that are being paid to the state will be used for infrastructure, school funds, and essential services, as the oil and gas taxes are intended to, the inflation in the prices caused partly for the Russian invasion of Ukraine could lead to an economic recession.
At the same time, the oil and gas industry is racking up big bottom profits. The increase in the prices, produced by consumers that are willing to pay for gasoline and electricity despite the elevated rates, has duplicated the earnings.
In the state of Texas, natural gas producers are obligated to pay 7.5% of market value, and on crude oil, the taxes correspond to 4.6% of the market value. That’s one of the main reasons the oil and gas group is paying so many taxes.
Exxon Mobil, a global energy company that has its headquarters in Texas earned $5.5 billion in the first 5 months of this year. This amount is much bigger than what the company earned last year, according to the Dallas Morning News.
In an interview with Dallas Morning News, Joshua Rhodes, an energy researcher from the University of Texas at Austin, said that in this whole process the consumers are the ones who are more affected by the inflation. “People may feel better knowing that energy companies are paying their fair share of taxes,” he said.
At the same time, oil and gas companies are subject to the international market price; they can’t raise prices only because they pay more taxes, according to Todd Staples, president of the Texas Oil & Gas Association.
But the prices are subject to inflation and other external factors. Today in Texas the price per gallon is $4.6, but last year it was $2.7. The average electricity rate has risen 70%, according to the Dallas Morning News.
On the silver lining, this rise in the prices has added 26,700 jobs to the industry. Still, Bruce Bullock, director of the Maguire Energy Institute at Southern Methodist University, told the Dallas Morning News that if the prices continue to rise, an economic recession won´t be inevitable.
