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Tuesday, August 02, 2022

More profiteering at our expense

Hot on the heels of Shell and Centrica announcing huge windfalls, BP has become the latest multi-national to hand billions of pounds to its shareholders after tripling its profits to nearly £7bn in the second quarter of the year amid high oil prices during Russia’s invasion of Ukraine, even as families struggle in a cost of living crisis.

The Guardian reports that the FTSE 100 oil company said its preferred measure of profit, which it describes as its underlying replacement cost profit, rose to $8.5bn (£6.9bn) between April and June. That is up from $6.2bn in the first three months of the year, and three times BP’s underlying profits of $2.8bn in the second quarter of 2021:

Oil companies in the UK and beyond have enjoyed booming earnings in recent months on the back of rising energy prices as households around the world have struggled with soaring bills. As Russia’s invasion grinds on, analysts have predicted the UK annual energy bills could jump to £3,850 in the winter, three times what they were paying at the start of 2022.

Shell last week reported record quarterly profits of nearly £10bn between April and June, while the British Gas owner, Centrica, made operating profits of £1.3bn, most of which came from its oil and gas drilling division. Shell and France’s Total last week said they would also give shareholders billions of dollars in share buybacks and dividends.

Despite this the government is giving the oil companies 80% tax breaks for new investments that reduce their tax bill, while their the 25% windfall tax, known as the energy profits levy, did not come into force until 14 July, meaning that it does not apply to profits made by BP or other oil companies during the second quarter.

The time for government action on this profiteering is long past. What do we need to do to make ministers act in the interests of families struggling to pay energy and fuel bills?
A false connection is being made between the retail market in the UK, which is marginal, and the windfall profits made by the multi-nationals on the international market. I agree that there is no need for any government to lob any more public money to the oil giants. However, I believe that the first duty of Shell and their ilk is to the people and lands that they exploit in extracting the source of their wealth. They can now well afford to pay the restitution that has been demanded of them and to have due concern for the environmental impact of their operations.

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