After BP’s big results announcement today, it’s clear that major questions remain about Rishi Sunak’s windfall tax. The oil giant registered profits of $8.2bn (£7.1bn) over the past three months, almost triple the profit it made for the same period last year. While BP reports it expects to pay about £700m in windfall tax on its North Sea operations this year, it also plans to spend more than three times that much on a $2.5bn (£2.17bn) share buyback programme, handing surplus cash back to its shareholders instead of using it for renewable investment or lowering prices.
Sunak introduced the tax when he was chancellor, promising to redistribute the extraordinary profits of oil and gas companies to households and businesses in the form of cost of living support. Thanks to extremely generous loopholes – which provide tax breaks in return for investments, such as drilling oil in the North Sea – the energy profits levy looks set to miss out on vital revenues. Shell has made more than $30bn (£26bn) in net income since the start of the year, and still hasn’t paid a single penny in additional tax from the levy in the UK.
