bp 2022 results oil and gas fossil fuels

BP reports massive profits rise sparking calls to ramp up windfall taxes

Image credit: reuters

BP has reported a massive rise in global profits leading to calls for the government to ramp up windfall taxes to help UK households cope with high energy prices this winter.

The oil and gas giant made £7.1bn between July and September which amounts to more than double its profit for the same period last year.

This was even more than the figure predicted by market analysts, who forecast that the firm would make £5.3bn over the quarter.

“Another week, another £7.1bn banked by BP in profits, with billions to be paid out to investors,” Greenpeace UK campaigner Philip Evans said.

“Meanwhile the homes of the poorest households in the UK urgently need insulation, the growing numbers in fuel poverty need financial support, and further investment in cheap renewables could lower our bills permanently.

“As Chancellor, [Rishi] Sunak imposed a windfall tax on these companies but gave them a loophole so big it turned into a huge tax break for more oil and gas. That won’t address the cost of living crisis, won’t provide energy security and will only make the climate emergency worse.

“An appropriate level of tax on BP and the other oil majors could contribute to the costs of the energy crisis and adapting to climate impacts.”

After months of mounting pressure from MPs and public bodies, then-Chancellor Rishi Sunak announced in May that millions of households would receive a £400 discount on their energy bills paid for by a £5bn tax on oil and gas giants.

BP has told shareholders that it expects to pay out $2.5bn (£2.2bn) in taxes for its UK North Sea business this year. This includes $800m of tax related to the energy profits levy, or windfall tax.

Despite this, Shell recently confirmed that it will not need to pay any additional taxes related to the levy as it has made use of a loophole that allows it to offset much of its profits by defining them as investment related.

While announcing the results, Bernard Looney, BP CEO, was keen to note his firm’s ambitions to eventually move its business away from being primarily a fossil fuel provider.

“We remain focused on helping to solve the energy trilemma – secure, affordable and lower-carbon energy,” he said.

“We are providing the oil and gas the world needs today while, at the same time, investing to accelerate the energy transition. Our agreement on Archaea Energy is the most recent step in our strategic transformation of BP.”

In August, a UK oil and gas body said that the windfall tax on energy firms should be scrapped by 2025 or it will have a “detrimental impact” on investment in the domestic sector.

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