The CEO of Austrian group OMV said on Thursday that the European Union’s proposed tax on extraordinary profits made by energy companies could have a huge impact on OMV, and also criticized the fact that the proposal is based on profits from recent three years, which were not normal years, Reuters reports.

The European Commission proposed on Wednesday a temporary solidarity contribution from the surplus profits generated by the activities in the oil, natural gas and refinery sectors that are not covered by the inframarginal income ceiling. According to the proposal of the Community Executive, the energy companies will pay a solidarity contribution of 33% of the profits for the current year, which is more than a 20% increase compared to the average profits of the last three years.

“We will watch this carefully because it can have a massive impact,” said Alfred Stern at a meeting with journalists on Thursday, adding that the details of the proposal have not yet been published so it is difficult to estimate what the exact impact will be, according to Agerpres.

According to Alfred Stern, it does not make sense to use the last three years as a basis for calculation, because the period from 2019 to 2021 was marked by the coronavirus pandemic, and the price of oil was at a certain point below 25 dollars per barrel while the price of natural gas dropped below 10 euros for a Megawatt hour.

“During this period, there were many oil and gas companies that encountered significant difficulties,” added the OMV CEO.