CEO Galeb praises the Minister of Economy after the decline in the new tax on oil companies

CEO Galeb praises the Minister of Economy after the decline in the new tax on oil companies

Antonio Costa e Silva ‘was building yesterday,’ when he said the new tax wasn’t on the table after all, says Andy Brown

The CEO of Galeb Company praised the Minister of Economy this morning after he backtracked on the launch of a new tax on oil companies.

“Antonio Costa e Silva was a builder when he said yesterday that he was not at the table,” Andy Brown said, speaking to reporters.

The controversy revolves around the so-called “sudden profit tax” (an expression that can be translated as “a windfall tax”), which is a tax on profits earned by companies that take advantage of conditions that they neither control nor cause. This is the case for the business of oil companies without direct operations in Russia, as they benefit from high oil prices without incurring the losses of having to abandon investments in the invading state of Ukraine.

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Galp boss: “Yes, we’re making money and the war has raised prices”

On April 8, the Minister of Economy said in Parliament that the government had agreed to introduce this new tax for companies that benefit from unexpected events that appeared to target oil companies and food distribution companies that benefit from the price hikes caused by the war. “We cannot antagonize companies but we will talk to them and consider imposing an ‘unexpected tax’ on the random and unexpected profits they generate,” Antonio Costa Silva said in Parliament.

But the economy minister backed down. Yesterday, too, he stated in Parliament that the government is not “at present” considering imposing a temporary tax on companies making extraordinary profits due to the war.

And so Andy Brown welcomes the fact that the new tax idea is not going forward. He stressed that “a very small portion of Galp’s profits are made in Portugal”. He explained that the business lives in cycles, both positive and negative, relative to the current positive impact of oil prices on the refining business and fuel sales.

“For a company like Galp, big swings in prices are not welcome. Two years ago oil prices were negative.” Now the situation is different, the refining business is making money from high oil prices. But “we prefer stability to volatility.”

Andy Brown concluded, “It’s the oil producers who make the money. It’s not the refineries or gas stations.”

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