The Government is failing the UK and the climate in its hour of need.” The energy industry has insisted that the “mega” profits companies are currently enjoying are not connected to soaring household bills.Ĭritics have given this line short shrift.ĭoug Parr, chief scientist for Greenpeace UK, said: “While households are being plunged into poverty with knock-on-impacts for the whole economy, fossil fuel companies are laughing all the way to the bank. What do campaigners make of the disparity between profits and bills? The Energy Profits Levy will apply to profits arising on or after 26 May and “will be phased out when oil and gas prices return to historically more normal levels”. The Shell announcement prompted fresh calls from campaigners for the Government to introduce a windfall tax – a one-off levy made when firms enjoy what are deemed to be unreasonably high profits thanks to circumstances beyond their control – on oil and gas profits.īoris Johnson previously rejected such a move, claiming it would “slow down growth” by discouraging investment in the energy sector.īut later in May, then-chancellor Rishi Sunak announced the introduction of a temporary 25 per cent levy charged on profits of oil and gas companies. This came after the firm previously announced a quarterly profit from January to March of $9.1bn (£7.3bn). Shell, Europe’s largest oil company, reported record profits of nearly £10bn for the April-to-June period. Last week, British Gas owner Centrica reported half-year group profits of £1.3bn, a fivefold increase of the £242m recorded for the same timeframe in 2021. ![]() Are other energy firms making big profits? The company had already bought back $4.1bn (£3.3bn) of its own shares so far this year. ![]() However, a significant amount of the profits will find its way to shareholders, with BP boosting its dividend by 10 per cent and planning to buy back $3.5bn (£2.9bn) of its own shares over the next three months. “We do this by providing the oil and gas the world needs today – while at the same time, investing to accelerate the energy transition.” Our people have continued to work hard throughout the quarter helping to solve the energy trilemma – secure, affordable and lower carbon energy. The company said it plans to invest around $15bn (£12.2bn) this year on initiatives including new wind farms and hydrogen projects.īP CEO Bernard Looney said: “Today’s results show that BP continues to perform while transforming. The energy giant insists a large amount of its profits are re-invested into green energy projects and improving existing infrastructure. The latest figure brings the firm’s half-year profits to $14.6bn (£11.9bn). Where does all the money go?īP announced that underlying profits for the second quarter of 2022 reached $8.45bn (£6.9bn), up from $6.2bn (£5bn) for the first three months of the year. UK firms that are benefiting from the price increases “cannot significantly influence” the global situation, he added. Will Webster, energy policy manager at Offshore Energies UK, which represents 400 companies involved in the UK’s oil, gas, wind and other offshore sectors, said the rising cost of energy was a global phenomenon. Mr Mould noted that BP had also “helped itself” with a cost-cutting and debt-reduction programme launched after the oil price collapse of 2020, when at one point oil prices plummeted down to negative figures for the first time in history – meaning oil producers were paying buyers to take the commodity off their hands amid fears over storage capacity. It is also notable that the results are significantly ahead of what analysts had pencilled in.” Mr Mould added: “The fact it produced its highest quarterly profit in 14 years, even though oil prices have been higher during that period than they are now, suggests BP is a more efficient machine than it was previously. When combined with a further $1.1bn (£900m) in liquids trading that accounted for around a third of its overall profits. The more volatile the market – as has been the case throughout 2022 – the higher the potential earnings.īP made an estimated $1.3bn (£1.1bn) gas trading profits in the first three months of this year alone. ![]() BP said it had seen “exceptional” performance by its oil traders as well improved refining margins.Ĭompanies such as BP and Shell do not simply produce and sell oil, they employ thousands of traders who buy and sell oil produced by other firms and make profit on fluctuations in its market price. However, that boost in income does not all come our household energy bills oil firms say. “Like its rival Shell, BP has benefited substantially from soaring prices for oil and gas resulting from the invasion of Ukraine,” said Russ Mould, investment director at investment platform AJ Bell.
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