BP sees huge profit due to high oil and gas prices
BP has reported a huge profit for July to September due to high oil and gas prices exacerbated by Russia’s invasion of Ukraine.
The oil giant made $8.2bn (£7.1bn) for the period, more than double the profit over the same three months last year.
BP said it will pay $800m in windfall tax this year, a levy on profits made from extracting UK oil and gas.
Oil firms’ big profits are expected to lead to renewed calls for this windfall tax on energy firms to be increased.
The windfall tax was introduced by Rishi Sunak when he was chancellor. At the time Mr Sunak said the levy – which they have called an Energy Profits Levy – would raise £5bn in its first year.
Alok Sharma, UK’s COP president, tweeted: We need to raise more money from a windfall tax on oil and gas companies and actively encourage them to invest in renewables.”
That could include increasing the rate oil and energy companies have to pay on extraordinary profits, extending the timeframe it applies for or expanding it to include electricity generators.
The Treasury has warned that everyone will need to pay more tax “in the years ahead” as Mr Sunak, now prime minister, attempts to fill a “black hole” in public finances.
Last week, BP’s rival Shell revealed that it had paid no windfall tax in the UK because it had invested millions of pounds. But it said it expected to start paying the levy next year.
While BP is set to pay some windfall tax, it will also give its shareholders a boost by increasing its dividend payment by 10%, and will also spend $2.5bn buying back shares.
Oil and gas prices, which began increasing once Covid restrictions eased, accelerated after Russia invaded Ukraine in late February, resulting in huge profits for energy companies. But they have also exacerbated price rises – or inflation – for consumers.
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