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Shell reports highest profits in 115 years

Oil and gas giant Shell, has reported record annual highest profits in 115 years, after energy prices surged last year, and the governments blame Russia's invasion of Ukraine as the reason that the public must enrich the local oil and gas companies.
So we pay more money to your local oil and gas companies, that profit from the war in Ukraine almost as the war industry. just for the record, Oil and gas giant Shell company profits, hit 40 billion dollar in 2022, double last year's total earnings, and the highest in its 115-year history.

So if anybody tell you that the war in Ukraine is not a miracle, it's probably because they are not from the oil and gas business.

Profits hit $39.9bn (£32.2bn) in 2022, double last year's total and the highest in its 115-year history.

Energy firms have seen record earnings since oil and gas prices jumped following the invasion of Ukraine.

It has heaped pressure on firms to pay more tax as households struggle with rising bills.

Opposition parties said Shell's profits were "outrageous" and the government was letting energy firms "off the hook". They also called for the planned increase in the energy price cap due in April to be scrapped.

Energy prices had begun to climb after the end of Covid lockdowns but rose sharply in March last year after the events in Ukraine led to worries over supplies.

The price of Brent crude oil reached nearly $128 a barrel following the invasion, but has since fallen back to about $83. Gas prices also spiked but have come down from their highs.

It has led to bumper profits for energy companies, but also fuelled a rise in energy bills for households and businesses.

Last year, the UK government introduced a windfall tax - called the Energy Profits Levy - on the "extraordinary" earnings of firms to help fund its scheme to lower gas and electricity bills.

Despite the move, Shell had said it did not expect to pay any UK tax this year as it is allowed to offset decommissioning costs and investments in UK projects against any UK profits.

But on Thursday it said it paid $134m in UK windfall tax in 2022, and expected to pay more than $500m in 2023.

These numbers look small compared to its profits but Shell only derives around 5% of its revenue from the UK - the rest is made and taxed in other jurisdictions.

However, this may not satisfy those who think that a UK-headquartered company which has set a new record for corporate profits should be paying more, and those who will notice that Shell paid more to its shareholders than it spent on renewable investments.

The government is currently limiting gas and electricity bills so a household using a typical amount of energy will pay £2,500 a year.

However, that is still more than twice what it was before Russia's invasion, and the threshold is due to rise to £3,000 in April.

The government's windfall tax only applies to profits made from extracting UK oil and gas. The rate was originally set at 25%, but has now been increased to 35%.

Oil and gas firms also pay 30% corporation tax on their profits as well as a supplementary 10% rate. Along with the new windfall tax, that takes their total tax rate to 75%.

However, companies are able to reduce the amount of tax they pay by factoring in losses or spending on things like decommissioning North Sea oil platforms. It has meant that in recent years, energy giants such as BP and Shell have paid little or no tax in the UK.

'Fair share'
The annual profit figure far surpassed Shell's previous record set in 2008. The company also said it had paid out $6.3bn to its shareholders in the final three months of 2022, and that it planned another $4bn share buyback.

Shell chief executive Wael Sawan said the firm's latest results "demonstrate the strength of Shell's differentiated portfolio, as well as our capacity to deliver vital energy to our customers in a volatile world".

Labour's shadow climate change secretary Ed Miliband said: "As the British people face an energy price hike of 40% in April, the government is letting the fossil fuel companies making bumper profits off the hook with their refusal to implement a proper windfall tax.

"Labour would stop the energy price cap going up in April, because it is only right that the companies making unexpected windfall profits from the proceeds of war pay their fair share."

Liberal Democrat leader Ed Davey said: "No company should be making these kind of outrageous profits out of Putin's illegal invasion of Ukraine.

"They must tax the oil and gas companies properly and at the very least ensure that energy bills don't rise yet again in April.".
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