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Argument: Subsidizing oil companies does not lower global prices

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Supporting quotations

Sima Gandhi. "Turn off the oil subsidy spigot." Center for American Progress. July 6th, 2010: "Oil subsidies don’t help consumers at the pump. [...] oil companies are fond of saying that ending tax subsidies will cause disastrous price hikes. But the tax subsidies Sanders, the president’s budget, and other lawmakers propose for elimination pay companies to find and produce oil. Eliminating them will have little, if any, effect on consumer prices. A Joint Economic Committee report states, 'the removal or modification of [one of these subsidies] is unlikely to have any effect on consumer prices for oil and gas.' The committee found that subsidies do not affect production decisions in the near term. And in the long term the Energy Information Administration explains that the major factors affecting oil prices include the production limits set by the Organization of the Petroleum Exporting Countries and global disruptions in supply. Moreover, the minimal impact of tax subsidies on domestic production (as discussed above) underscores that eliminating tax subsidies will have little, if any, effect on oil prices."

Treasury Secretary Timothy Geithner told a Senate panel in February of 2010 that a White House proposal to repeal roughly $39 billion in oil, natural gas and coal industry tax breaks won't raise consumer energy prices: “We don’t think they are going to have any effect on prices. We don’t think they will. They have been carefully designed not to do that.”[1]

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