Calls for a windfall tax on oil and gas giants intensified today after Shell posted record £7bn profits, just days after bumper earnings were revealed by rival BP.
Boris Johnson faces renewed demands to act as Brits face a cost of living crisis due to rising energy bills while firms rake in huge earnings.
Shell posted better-than-expected underlying earnings for the first three months of 2022, at 9.1 billion US dollars (£7.2 billion) – nearly three times the 3.2 billion dollars (£2.5 billion) reported a year earlier.
And on Tuesday, fellow FTSE 100 firm BP unveiled its highest quarterly underlying profits for more than a decade, at 6.2 billion US dollars (£5 billion).
The sector is reaping the benefits of rocketing oil and gas prices, which have been pushed to record levels by Russia ’s invasion of Ukraine and surging demand as economies emerge from the pandemic.
Chancellor Rishi Sunak has so far resisted pressure to make the firms pay more tax, instead looking to companies making big profits to invest the cash back into the UK.
Labour and Liberal Democrats have been urging the government to introduce a windfall tax on oil and gas firms to help struggling households.
Ed Miliband, Shadow Climate Change and Net Zero Secretary, said: “Another day, another oil and gas company making billions in profits, and yet another day when the Government shamefully refuses to act with a windfall tax to bring down bills.
“Even the boss of BP has said that this will not impact investment. The Conservatives have run out of excuses, and been exposed for the political choice they are making by not acting.
“The truth is that the Government’s priority is protecting oil and gas giants, not supporting the British people."
Lib Dem leader Sir Ed Davey condemned the Government’s refusal to consider the tax.
He said: “ Boris Johnson and Rishi Sunak’s refusal to tax the super-profits of energy companies is completely unforgivable when people are too terrified to heat their homes.
“The excuses of Conservative ministers have been demolished by the boss of BP himself, who said a windfall tax wouldn’t damage investment in the UK.
“This one-off levy would raise billions of pounds that could help vulnerable families with their energy bills now. It is a no-brainer.”
Campaign group Greenpeace said a windfall tax would be the “fastest and fairest way to ease pressure on households feeling the pinch and reduce our dependence on oil and gas”.
Greenpeace UK’s oil and gas campaigner, Philip Evans, said: “By using a big chunk of the bloated profits that Shell, BP and others are raking in to make homes warmer, more energy-efficient and kitted out with heat pumps, the Government could start to really tackle the climate and cost-of-living crises simultaneously.”
Like its FTSE 100 Index rival BP, Shell’s figures also showed a hit from its move to pull out of Russia due to the Ukraine war as it booked a 3.9 billion dollar (£3.1 billion) charge.
Despite this, it still saw current cost of supply (CCS) earnings attributable to shareholders jump to 5 billion dollars (£4 billion) in the quarter, up from 4.3 billion dollars (£3.4 billion) a year ago, though it was down 38% on the previous three months.
Shell said investor dividend payments and share repurchases hit 5.4 billion US dollars (£4.3 billion) in the quarter, as part of a plan to buy back 8.5 billion US dollars (£6.8 billion) of shares in the first half of 2022.
It increased its dividend to 25 cents (20p) per share and said it also expects shareholder returns to be more than 30% of cashflow in the second half of 2022.
