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
Satirical Sketch Sparks Political Spouse Feud in South Korea
Indonesia Quarry Collapse Leaves Multiple Dead and Missing
South Korean Election Video Pulled Amid Misogyny Outcry
Asian Economies Shift Away from US Dollar Amid Trade Tensions
Netflix Investigates Allegations of On-Set Mistreatment in K-Drama Production
US Defence Chief Reaffirms Strong Ties with Singapore Amid Regional Tensions
Vietnam Faces Strategic Dilemma Over China's Mekong River Projects
Malaysia's First AI Preacher Sparks Debate on Islamic Principles
Meta and Anduril Collaborate on AI-Driven Military Augmented Reality Systems
Russia's Fossil Fuel Revenues Approach €900 Billion Since Ukraine Invasion
Alcohol Industry Faces Increased Scrutiny Amid Health Concerns
U.S. Goods Imports Plunge Nearly 20% Amid Tariff Disruptions
Italy Faces Population Decline Amid Youth Emigration
Trump Accuses China of Violating Trade Agreement
OpenAI Faces Competition from Cheaper AI Rivals
Foreign Tax Provision in U.S. Budget Bill Alarms Investors
Russia Accuses Serbia of Supplying Arms to Ukraine
Gerry Adams Wins Libel Case Against BBC
EU Central Bank Pushes to Replace US Dollar with Euro as World’s Main Currency
U.S. Health Secretary Ends Select COVID-19 Vaccine Recommendations
Trump Warns Putin Is 'Playing with Fire' Amid Escalating Ukraine Conflict
India and Pakistan Engage Trump-Linked Lobbyists to Influence U.S. Policy
U.S. Halts New Student Visa Interviews Amid Enhanced Security Measures
Trump Administration Cancels $100 Million in Federal Contracts with Harvard
SpaceX Starship Test Flight Ends in Failure, Mars Mission Timeline Uncertain
King Charles Affirms Canadian Sovereignty Amid U.S. Statehood Pressure
EU Majority Demands Hungary Reverse Anti-LGBTQ+ Laws
Top Hotel Picks for 2025 Stays in Budapest Revealed
Iron Maiden Unveils 2025 Tour Setlist in Budapest
Chinese Film Week Opens in Budapest to Promote Cultural Exchange
Budapest Airport Launches Direct Flights to Shymkent
Von der Leyen Denies Urging EU Officials to Skip Budapest Pride
Alcaraz and Sinner Advance with Convincing Wins at Roland Garros
EU Ministers Lack Consensus on Sanctioning Hungary Over Rule of Law
EU Nations Urge Action Against Hungary's Pride Parade Ban
Putin's Helicopter Reportedly Targeted by Ukrainian Drones
U.S. Considers Withdrawing Troops from Europe
Russia Deploys Motorbike Squads in Ukraine Conflict
Critics Accuse European Court of Human Rights of Overreach
Spain Proposes 100% Tax on Non-EU Holiday Home Purchases
German Intelligence Labels AfD as Far-Right Extremist
Geert Wilders Threatens Dutch Coalition Over Migration Policy
Hungary Faces Multiple Challenges Amid EU Tensions and Political Shifts
Denmark Increases Retirement Age to 70, Setting a European Precedent
Any trade deal with US must be based on respect not threats', says EU commissioner
UK Leads in Remote Work Adoption, Averaging 1.8 Days a Week
Thirteen Killed in Russian Attacks Across Ukraine
High-Profile Incidents and Political Developments Dominate Global News
Netanyahu Accuses Western Leaders of 'Emboldening Hamas'
Ukraine and Russia Conduct Largest Prisoner Exchange of the War
×