President Joe Biden will call on Congress to consider tax penalties for oil and gas companies accruing record profits, according to a White House official, amid stubbornly high gasoline prices that are dragging on Democrats’ midterm prospects.  

This could include a so-called windfall profit tax -- which Democrats have been proposing for more than a decade without success. The idea has renewed attention among progressives in Congress after gasoline prices spiked to more than $5 a gallon this summer. 

Senator Ron Wyden, an Oregon Democrat and Biden ally who chairs the tax-writing Finance Committee, has floated a proposal that would impose a new federal surtax on oil companies that record a profit margin better than 10%. 

The White House official didn’t confirm that Biden would specifically call for the windfall tax after AP reported earlier Monday that he would. Biden will press oil and gas companies to invest their profits in lowering costs for Americans, the official said. 

The president is scheduled to deliver remarks Monday afternoon, according to the White House, on “reports over recent days of major oil companies making record-setting profits even as they refuse to help lower prices at the pump for the American people.”

Biden also could reiterate his request for Congress to eliminate a slew of tax incentives enjoyed by the industry, including a deduction of intangible drilling costs, which allows oil and gas companies to immediately deduct some expenses, such as labor, site preparation and repairs.

Administration officials have weighed a number of other steps to encourage oil refiners to keep more gasoline and diesel inside the US, instead of exporting it, as domestic stockpiles shrink ahead of winter. New restrictions on the export of finished fuels, including diesel, could be imposed administratively.

Oil industry trade groups have argued a windfall tax would penalize domestic energy and fuel production right when the US should be encouraging more of both.

“Rather than taking credit for price declines and shifting blame for price increases, the Biden administration should get serious about addressing the supply and demand imbalance that has caused higher gas prices and created long-term energy challenges,” American Petroleum Institute President and Chief Executive Officer Mike Sommers said in a statement.

“Today, the president is proposing to raise taxes on the U.S. natural gas and oil industry that is competing globally to produce the fuels Americans need every single day.” 

The S&P 500 Energy Index initially erased a 2% gain after the news broke but partially recovered trading up 0.9% at 2:04 p.m. in New York. Refining stocks led the declines.

The Biden proposal resembles measures that politicians across Europe, and in some other countries such as India, are imposing on companies reaping record profits from fossil fuels and power generation. Mostly, those governments are using cash raised from windfall taxes to help subsidize soaring energy bills for households.

Critics of such plans say they’ll deter companies from making the kind of investments that are crucial for increasing supply, and keeping prices down, in the future -- a charge that may have more traction in the US, which unlike most European countries is itself a major oil and gas producer.

Stubbornly high energy costs and their knock-on effect on inflation are weakening Democrats’ prospects heading into next week’s midterm elections. The vote will determine whether the party maintains its current House and Senate majorities. Americans continue to rank the economy and inflation as their top priorities in polling.

Biden has been calling on companies to invest more in fresh production for most of this year. But Exxon Mobil Corp., Chevron Corp., Shell Plc and TotalEnergies SE are on track to hand almost $100 billion to shareholders annually in buybacks and dividends while reinvesting just $80 billion in their core businesses this year, according to data compiled by Bloomberg.

The Western world’s five biggest oil companies made more than $60 billion in the second quarter, beating the previous record set in 2008 by nearly 50%. On Friday, Exxon announced it had even surpassed its record second-quarter results, by earning $19 billion in just three months.

Biden on Friday assailed Exxon for handing profits back to investors instead of lowering prices.

“Can’t believe I have to say this, but giving profits to shareholders is not the same as bringing prices down for American families,” Biden tweeted.

Exxon’s Chief Executive Officer Darren Woods hit back at Biden’s criticism last week prior to the company’s earnings call. “There has been discussion in the US about our industry returning some of our profits directly to the American people,” Woods said. “That’s exactly what we’re doing in the form of our quarterly dividend.”

Oil executives say there’s a limit to how much they can do to ease prices in the short-term. Major projects take years of planning and development and need to offer attractive long-term returns, supported by consistent energy policies. 

Chevron CEO Mike Wirth warned a windfall profit tax or export ban would be “short-sighted” because it would deter investment in energy. “Typically, if you want less of something, you tax it,” he said in a Bloomberg TV interview.