TotalEnergies Reports 51% Profit Rise Amid Calls for European Oil Tax

TotalEnergies reported a 51% increase in its first-quarter net profit, reaching $5.8 billion or €4.94 billion, according to its financial results. This rise occurs as oil prices have surged due to the war in the Middle East. The company operates amid an energy crisis that has increased costs for consumers.

Proposals to tax profits of multinational energy companies have multiplied in France, spanning from left to far-right political groups. The French government has rejected criticism of TotalEnergies and encouraged voluntary profit redistribution, such as rebates at gas pumps.

Officials stated that no options are off the table but have not advanced new measures.

A national tax on superprofits may yield less revenue than expected, based on experiences from the 2023 energy crisis. Most of TotalEnergies' profits are generated outside France, and multinational companies often shift profits to low-tax jurisdictions during crises, as shown in a study by the International Tax Observatory.

International coordination is needed but is not imminent. Having a major energy company that secures long-term supplies, invests in refining, and influences geopolitical energy balances provides strategic benefits. The focus should be on determining the appropriate location and method for taxation rather than eliminating such assets.

In early April, Germany, Austria, Spain, Italy, and Portugal urged the European Commission to implement a coordinated levy on energy groups. Joining this effort could help France avoid distortions in competition, reduce tax optimization across borders, and ensure contributions from companies profiting amid the war.

A European mechanism would address the global nature of the issue. If the crisis persists, avoiding taxation debates may become politically challenging in France, especially without a majority in the Assemblée Nationale. Democratic societies show low tolerance for visible inequalities, such as shareholders gaining during wartime while consumers face high fuel costs.

Coordinated taxation could mitigate tensions and prevent unpredictable outcomes.