Budapest Post

Cum Deo pro Patria et Libertate
Budapest, Europe and world news

BP profits double to $6.2bn, fuelling calls for energy windfall tax

BP profits double to $6.2bn, fuelling calls for energy windfall tax

Results are ‘obscene’, say unions, after soaring oil and gas prices help company to beat forecasts
BP’s profits more than doubled to $6.2bn (£5bn) in the first three months of the year, adding to pressure on ministers to impose a windfall tax to aid households struggling with soaring energy and fuel bills.

The energy giant reported its highest quarterly profit in more than a decade – with the figure far higher than the $4.5bn that analysts had expected.

The huge earnings fuelled demands for the government to introduce a one-off levy on the companies benefiting from high oil and gas prices.

Campaigners argue the money raised by the tax could be used to ease the burden for those hardest hit by the cost of living crisis.

The chancellor, Rishi Sunak, hinted last week for the first time that a windfall tax was a possibility if energy companies did not properly reinvest bumper profits. However, on Tuesday morning Boris Johnson argued against such a tax.

“If you put a windfall tax on the energy companies, what that means is that you discourage them from making the investments that we want to see that will, in the end, keep energy prices lower for everybody,” the prime minister told ITV’s Good Morning Britain.

However, when the chief executive of BP, Bernard Looney, was asked by the Times which of its planned £18bn of UK investments it would drop if a windfall tax were imposed, he said: “There are none that we wouldn’t do.”

Labour seized on the remarks, with the shadow energy secretary, Ed Miliband, tweeting: “The government’s whole case against the windfall tax has now been exposed as a sham by none other than the boss of BP. He himself says it wouldn’t affect investment. He is right, their windfall profits are going mostly into share buybacks. The government have run out of excuses.”

Looney told reporters that the war in Ukraine was increasing living costs, which was “creating a terrible situation for many people around the world”. He said BP was closely working with governments on the “trilemma of delivering cleaner, reliable and affordable energy”.

He estimated that a million barrels of Russian oil a day had been removed from the market and this could double this month under existing sanctions, even before the EU decides on an oil embargo, which is supported by Germany.

BP announced a $2.5bn share buyback programme on the back of the bumper profits. Looney has promised that the company will buy back at least $1bn of shares every quarter while oil prices are above $60 a barrel. The war in Ukraine has driven Brent crude, the global benchmark, above $100 a barrel.

The company also said it intended to invest up to £18bn in the UK’s energy system by the end of 2030, including offshore wind projects in the Irish Sea in partnership with the German energy firm EnBW, and £1bn in electric vehicle charging points. BP is raising investment from 10%-15% of capital to 15%-20% of capital.

The UK oil group made an underlying replacement cost profit of $6.2bn between January and March, the biggest quarterly figure since autumn 2008, and compared with $2.6bn in the same quarter last year. This was the result of “exceptional oil and gas trading”, higher prices and better refining results. Shares closed 5.8% up on Tuesday, making BP the biggest riser on the FTSE 100.

Frances O’Grady, the TUC general secretary, said: “At a time when households across Britain are being hammered by soaring bills and prices these profits are obscene. The government must stop making excuses and impose a windfall tax.”

The Liberal Democrat leader, Ed Davey, called the failure to bring in a windfall tax “an unforgivable lack of leadership from Boris Johnson at a time of national crisis”.

BP wrote down the value of its business in Russia, and including the resulting $24bn charge, reported a quarterly headline loss of $20.4bn, its biggest ever. The company also incurred a $1.1bn deferred tax liability relating to Russia withholding tax on BP’s share of the Russian state-owned energy firm Rosneft’s profit.

Looney said: “In a quarter dominated by the tragic events in Ukraine and volatility in energy markets, BP’s focus has been on supplying the reliable energy our customers need. Our decision in February to exit our shareholding in Rosneft resulted in the material non-cash charges and headline loss we reported today.”

Along with its rival Shell, BP bowed to pressure from the UK government to sever its ties with Russia after the invasion of Ukraine, and said in late February that it would offload its 19.75% shareholding in Rosneft. BP’s two directors stepped down from the Rosneft board the same day.

BP said western sanctions against Moscow meant that “it is not currently possible to estimate any value other than zero” for its Rosneft shareholding, which it could try to sell back to Rosneft at a huge discount.
AI Disclaimer: An advanced artificial intelligence (AI) system generated the content of this page on its own. This innovative technology conducts extensive research from a variety of reliable sources, performs rigorous fact-checking and verification, cleans up and balances biased or manipulated content, and presents a minimal factual summary that is just enough yet essential for you to function as an informed and educated citizen. Please keep in mind, however, that this system is an evolving technology, and as a result, the article may contain accidental inaccuracies or errors. We urge you to help us improve our site by reporting any inaccuracies you find using the "Contact Us" link at the bottom of this page. Your helpful feedback helps us improve our system and deliver more precise content. When you find an article of interest here, please look for the full and extensive coverage of this topic in traditional news sources, as they are written by professional journalists that we try to support, not replace. We appreciate your understanding and assistance.
Newsletter

Related Articles

0:00
0:00
Close
Munich Airport Reopens After Second Drone Shutdown
Pro Europe and Anti-War Babiš Poised to Return to Power After Czech Parliamentary Vote
Sean ‘Diddy’ Combs Sentenced to Fifty Months in Prison Following Prostitution Conviction
Altman Says GPT-5 Already Outpaces Him, Warns AI Could Automate 40% of Work
Russian Research Vessel 'Yantar' Tracked Mapping Europe’s Subsea Cables, Raising Security Alarms
Global Cruise Industry Posts Dramatic Comeback with 34.6 Million Passengers in 2024
U.S. Demands Brussels Scrutinize Digital Rules to Prevent Bias Against American Tech
Private Equity’s Fundraising Surge Triggers Concern of European Market Shake-Out
Tokyo’s Jimbōchō Named World’s Coolest Neighbourhood for 2025
European Officials Fear Trump May Shift Blame for Ukraine War onto EU
The Personality Rights Challenge in India’s AI Era
Italy Considers Freezing Retirement Age at 67 to Avert Scheduled Hike
Italian City to Impose Tax on Visiting Dogs Starting in 2026
Study Finds No Safe Level of Alcohol for Dementia Risk
Trump Says Ukraine Can Fully Restore Borders with NATO Backing
Europe Signals Stronger Support for Taiwan at Major Taipei Defence Show
Germany Weighs Excluding France from Key European Fighter Jet Programme
Cyberattack Disrupts Check-in and Boarding Systems at Major European Airports
Björn Borg Breaks Silence: Memoir Reveals Addiction, Shame and Cancer Battle
When Extremism Hijacks Idealism: How the Baader-Meinhof Gang Emerged and Fell
JWST Data Brings TRAPPIST-1e Closer to Earth-Like Habitability
Trump Orders $100,000 Fee on H-1B Visas and Launches ‘Gold Card’ Immigration Pathway
France’s Looming Budget Crisis and Political Fracture Raise Fears of Becoming Europe’s “Sick Man”
Three Russian MiG-31 Jets Breach Estonian Airspace in ‘Unprecedentedly Brazen’ NATO Incident
European manufacturers against ban on polluting cars: "The industry may collapse"
Turkish car manufacturer Togg Enters German Market with 5-Star Electric Sedan and SUV to Challenge European EV Brands
Christian Brueckner Released from German Prison after Serving Unrelated Sentence
World’s Longest Direct Flight China Eastern to Launch 29-Hour Shanghai–Buenos Aires Direct Flight via Auckland in December
New OpenAI Study Finds Majority of ChatGPT Use Is Personal, Not Professional
The conservative right spreads westward: a huge achievement for 'Alternative for Germany' in local elections
Pope Leo Warns of Societal Crisis Over Mega-CEO Pay, Citing Tesla’s Proposed Trillion-Dollar Package
Poland Green-Lights NATO Deployment in Response to Major Russian Drone Incursion
U.S. and China Agree on Framework to Shift TikTok to American Ownership
Le Pen Tightens the Pressure on Macron as France Edges Toward Political Breakdown
Czech Republic signs €1.34 billion contract for Leopard 2A8 main battle tanks with delivery from 2028
Penske Media Sues Google Over “AI Overviews,” Claiming It Uses Journalism Without Consent and Destroys Traffic
Indian Student Engineers Propose “Project REBIRTH” to Protect Aircraft from Crashes Using AI, Airbags and Smart Materials
One in Three Europeans Now Uses TikTok, According to the Chinese Tech Giant
Could AI Nursing Robots Help Healthcare Staffing Shortages?
NATO Deploys ‘Eastern Sentry’ After Russian Drones Violate Polish Airspace
The New Life of Novak Djokovic
German police raid AfD lawmaker’s offices in inquiry over Chinese payments
Volkswagen launches aggressive strategy to fend off Chinese challenge in Europe’s EV market
France Erupts in Mass ‘Block Everything’ Protests on New PM’s First Day
Poland Shoots Down Russian Drones in Airspace Violation During Ukraine Attack
Apple Introduces Ultra-Thin iPhone Air, Enhanced 17 Series and New Health-Focused Wearables
Macron Appoints Sébastien Lecornu as Prime Minister Amid Budget Crisis and Political Turmoil
Vatican hosts first Catholic LGBTQ pilgrimage
Apple Unveils iPhone 17 Series, iPhone Air, Apple Watch 11 and More at 'Awe Dropping' Event
France joins Eurozone’s ‘periphery’ as turmoil deepens, say investors
×