Industry

Calls for tougher windfall tax as BP announces tripling of profits

Climate campaigners have called for higher taxes on oil and gas companies after BP announced a tripling of profits this morning.

Photo: Sue Underwood

BP reported a 14-year high in second quarter profits, up to £6.92m, the highest level since 2008. The figure was three times that for the same period in 2021.

Last month, Shell announced it had doubled its profits for the second quarter to £9.5bn. Centrica, which owns British Gas, reported a five-fold increase in first-half profits to £1.3bn.

The announcements come as the research company, Cornwall, predicts that the price cap on energy bills will rise to £3,615 in January.

Greenpeace UK said this morning:

“Government must bring in a proper windfall tax on these monster profits and stop giving companies massive tax breaks on destructive new fossil fuel investments.”

Friends of the Earth said:

“It’s absurd that energy giants are raking in such huge sums in the midst of a cost-of-living crisis.”

BP said the profits would help the company to invest in Britain, with plans for up to £18bn this decade.

But when asked how much it was actually investing this year, chief executive, Bernard Looney, said “I don’t have a number”, the Times reported.

Part of the profits will be used to buy back more than £2.8bn of shares. BP also increased the dividend payment by 10%.

In May 2022, the then chancellor, Rishi Sunak, introduced an additional 25% tax on the profits of energy companies for 12 months, expected to raise around £5bn. But the windfall tax, known as the energy profits levy also included an 80% investment allowance. This means companies will get a 91p tax saving for every £1 they invest.

Friends of the Earth campaigner, Sana Yusuf, said: 

“Ministers must impose a much tougher windfall tax on massive oil and gas firm profits. It beggars belief that these companies are raking in such huge sums in the midst of a cost-of-living crisis. 

“The money raised should be used to help hard-up households with soaring energy bills and provide funding for a free home insulation programme – focusing on those most in need. 

“It’s astonishing that energy efficiency has been given such a low priority. A nationwide insulation programme would cut bills, reduce energy-use and slash climate-changing emissions.” 

Greenpeace UK’s chief scientist, Doug Parr, said:

“Massive profits and share buy-backs at energy companies, whilst millions of people will be unable to pay their energy bills (and go short of food) in shoddy homes tells you something has gone very wrong with the way we’re working.”

Green Party MP, Caroline Lucas, said:

“More obscene profits from these climate criminals – all whilst they’re paid to pollute by Treasury via tax reliefs, subsidies and other handouts. It doesn’t have to be like this! Time for a fossil fuel treat to keep it in the ground and deliver a just transition.”

The Green New Deal Rising, a movement of young people campaigning on the climate crisis, said:

“It’s a disgrace. The government must stop subsidising fossil fuel companies and invest in clean, renewable energy now”.

Friends of the Earth Scotland’s Oil and Gas Campaigner Freya Aitchison said:

“This announcement of yet another obscene profit for BP is a clear sign that our energy system is fundamentally broken.

“Rising energy prices are a key driver of the cost-of-living crisis, which is plunging millions of people in the UK into fuel poverty, yet bosses and shareholders at BP are getting even richer by exploiting one of our most basic needs.

“BP is also worsening climate breakdown and extreme weather by continuing to invest and lock us into new oil and gas projects for decades to come. Instead of allowing these companies to continue causing social and environmental devastation to boost their profits, we need to overhaul our energy system to rapidly phase out oil and gas.

“A fair and fast transition to renewables must ensure that everyone has access to affordable and clean renewable energy.”

Labour’s shadow minister for climate change, Kerry McCarthy, said:

“It’s wrong that oil and gas companies are making such excessive profits when inflation is sky-rocketing and energy bills are going through the roof.”

7 replies »

  1. I would like to know how much profit windfarms are making? I am a Scottish Power customer. I have opted that all my electricity is from renewable sources. I think this is actually undeliverable, as there are many days both in winter & summer (YES SUMMER) when renewables fail to contribute significant power to the grid. I went to Scottish Power’s website today. They only seem to report on annual basis (the legal minimum) regarding their accounts (2021 is the latest). So I cannot say how much profit they must be making from there windfarms this year. What I can say is that my electricity charges are rising as if I was being supplied from gas generated electricity.. Can anyone enlighten me here? If Scottish Power are making huge profits, would you support them being subject to a windfall tax?

    • Why should a windfall tax be taxed higher, when most UK pensions are market linked and the retired anti’s are living off there fossil fuels market linked pension. Then protesting against fossil fuels production, fracking applications, while consuming the same in their, homes and office!
      Pure Lunacy, you couldn’t make it up!!

  2. Can’t see a problem.

    With a windfall tax in place, more tax will be gathered if there is more activity. If people want more tax to be raised then perhaps having more activity to raise it from is not too complicated. After all, demand is still there and no tax will be contributed from over the horizon.

    Then, of course, there is always that gas UK is still sitting on!

  3. Great argument for those who deal in superficialities: the end justifying the immoral means. But if you don’t believe the means are immoral because you have rejected the scientific link between fracking and anthropogenic climate change, as has the previous poster, then there us nothing to worry about. Those who do accept the link might view the policy suggested as akin to government promoted pimping – clearly immoral.

  4. Ahh, the higher moral platform-from someone using plastic to try and build the platform!

    Meanwhile, when I visit a hospital I find all sorts of fossil fuel derived products helping to keep people alive. Are they being immoral? Should they just go and lie down in a yurt and fade away? After all, each individual is contributing to anthropogenic climate change. Those individuals living in an area and consuming rice, do so somewhat more, especially once they are allowed to have several children, who live beyond infancy. And, sorry Ukraine, the rest of Europe will just have to keep funding Putin. See where all this leads to?

    Those that tell blatant lies, quaintly known as fake news, are the ones who IMHO are immoral.

    Like yourself 1720, I use fossil fuels. I am content to do so. If you find it is immoral, why continue? Nothing to do with government, akin to an individual promoting pimping- apparently-and then trying to claim the moral high ground.

  5. What an extraordinary outburst! I’ll leave it to others to pick holes in all this while you contemplate ways of forbidding people to have several children or preventing the children living beyond infancy. Do you ever read your stuff?
    Signing off on this conversation. You’ve crossed the red, sorry blue, line!

  6. And eating rice, 1720, adding to anthropogenic climate change. Inconvenient, but if you don’t understand the comment you may find it extraordinary. Perhaps become aware of methane produced from rice production? Then it becomes ordinary.

    Yes, children living beyond infancy, as children have been enabled to do with life expectancy rising dramatically since the benefits-yes, benefits of fossil fuel-have been afforded to them. But, contributing to anthropogenic climate change.

    You raised the issue, 1720. If you want it discussed then don’t forget there are other parts to it.

    Signing off-again??!! Strange that this is a repeat process adopted when you have painted yourself into a corner. LOL. It is you that has done the painting, 1720. But signing off will save some plastic use, so thanks for that-until composure has been recovered and then, from past experience, just more of the same.

    Yes, I read my stuff, 1720. You are not obliged to, but if you do, please try and understand what you are reading. There were ways to control people having several children. That happened. That has been suspended. There were far more children that didn’t get past infancy, but that has been vastly improved. And, both situations add to anthropogenic climate change, as there are more people on the planet. People consume and exhale, 1720. Your favored phrase, but it is not a one trick pony. Maybe it would be wise to stop trying to weaponize as if it was? It only ends with you in the corner. It was YOU who asked ME to discuss the subject-AGAIN.

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