£40bn profits for BP and Shell fuel calls for windfall tax on energy firms
Oil giants BP and Shell are on course to make a combined profit of almost £40bn this year from the rocketing price of petrol and gas, fuelling calls for a windfall tax on energy firms to ease the cost of living crisis.
Before BP’s annual results this week, anti-poverty campaigners described the profits of oil producers as “obscene” and demanded the government take action to tax their surplus cash to support poorer families hit by rising energy bills.
MPs and unions said a large proportion of the industry’s profits were an unjustified windfall and the government should move quickly to impose a tax before the companies distribute them to shareholders.
Ed Miliband, the shadow climate change minister, said the oil and gas industry’s “booming” profits meant it was legitimate to impose a surcharge that would prevent millions of families from suffering hardship.
A windfall tax is supported by the Tory MP and former energy minister Chris Skidmore, who called it “the right way to go”, and the TUC, which said it was needed to prevent the growth of food banks and the prospect of fuel poverty for millions of people.
BP, which extracts oil in the North Sea, Alaska and the Gulf of Mexico, is this week expected to announce annual pre-tax profits in 2021 of more than £12bn, before signalling that it is on course to make a £15.5bn profit in 2022.
Last week Shell reported annual profits of £14.3bn, which analysts believe will grow to £23.6bn by the end of its financial year in June.
A report for the left-of-centre thinktank Common Wealth found that Shell and BP have channelled £147bn to shareholders via dividends and share buybacks over the past decade, with rival North Sea producers and the big six energy suppliers contributing another £47bn.
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