BP sees biggest profit in 14 years as energy bills soar

[Leroy N. Soetoro]

https://www.bbc.com/news/business-62382624

The energy giant saw underlying profits hit $8.45bn (£6.9bn) between April
and June - more than triple the amount it made in the same period last
year.

It comes as typical household energy bills have been forecast to hit more
than £3,600 a year this winter.

The bumper profits have prompted calls for the government to tax firms
further to help families with rising bills.

BP's profits were the second highest for the second quarter in the firm's
history.

It follows a host of profit announcements from other firms including
Shell, Equinor, TotalEnergies and British Gas owner Centrica, which have
been reaping the benefits of higher gas and oil prices.

Dale Vince, the founder of energy supplier Ecotricity said BP was "holding
a shedload of money that is coming from hard-pressed bill-payers in our
country", adding he believed it was time to increase taxation on the
profits of oil and gas companies.

"Clearly there are exceptional windfall profits in the oil and gas sector,
and clearly there's a problem in the energy market, and we should fix one
with the other," he told the BBC's Today programme.

Campaign groups Greenpeace and Friends of the Earth as well as Labour and
the Liberal Democrats also called for a tougher windfall tax on oil and
gas firm profits.

Professor Nick Butler, a former vice president of BP, said he believed the
energy giant was "very sensitive to the reputational problems of making
money at this level".

He told the BBC there was a "real case" for the government calling
together the industry "to find a plan to get us through the winter".

"You have Europe as a whole now cutting back gas use by 15% immediately,
which is not happening here, and actually going out around the world to
secure as much of the supply as they possibly can through the winter," he
said.

The government has introduced a package of measures to help people with
energy bills, such as a £400 discount, and following political pressure,
ministers announced in May that oil and gas firms would pay an extra 25%
on profits made in the UK.

The tax applies from 26 May to profit made in the UK, which for most oil
and gas companies is a small part of their operations. For BP, it accounts
for a tenth of overall oil and gas production.

BP will therefore not be required to pay the levy on the majority of the
profits it made between April and June.

The Treasury said it did not comment on "individual taxpayers", but added
it expected the windfall tax, called the Energy Profits Levy, to raise
about £5bn in its first year.

Critics of a windfall tax argue it might hit pension funds invested in
energy firms.

However, pension funds are invested across different countries and
industries, so a tax in one sector is unlikely to make a noticeable
difference.

What's driving up profits?
The huge increase in profits for firms has been fuelled by higher prices
for oil and gas, which have risen sharply due to the war in Ukraine.

In recent months, Russia has reduced supplies to Europe following the
invasion and fears are growing it may switch off the taps altogether.

The potential of gas supply problems has led to the wholesale price
soaring, which has led to energy firms passing those costs onto customers
- pushing up household energy bills by unprecedented amounts.

Higher oil prices have also led to the price of petrol and diesel reaching
record highs at the pumps in recent months, although prices have started
to fall slightly.

How does the windfall tax on energy firms work?
Could my energy bills go above £3,000?
Energy giants see profits soar as bills rise
Gas prices jump as Russia cuts German supply

Dr Craig Lowrey, principal consultant at Cornwall Insight, told the BBC's
Today programme that energy bills "at this point in time" looked set to
stay high across 2023 and into 2024 and warned higher bills was "a long-
term problem for households."

He said current government help would make a "dent" in higher bills but
was "not going to offset this."

'Cash machine'
BP said its bumper profit results were driven by strong refining margins
and oil trading. It announced it would boost shareholder payouts by 10% as
well as buy back shares as a result of its higher earnings.

Last year, chief executive Bernard Looney described the energy market as
"a cash machine".

But on Tuesday he said the company's staff had helped to solve an "energy
trilemma" which he added was "secure, affordable and lower carbon energy".

In a conference call he added: "In terms of cost of living we all have to
recognise that it's a very, very difficult place for people, not just, by
the way, in the UK but across of the world right now.

"We understand that, we get it. Our people inside the company get it, they
want to help."

Mr Looney said BP was "backing Britain" by investing £18bn in the country
this decade.

The company said its half-year figures were affected by a massive £19.9bn
hit from its move to ditch the its near-20% stake in Russian oil producer
Rosneft in response to the Ukraine war.

Richard Hunter, head of markets at online investment firm Interactive
Investor, said BP had "already made some strong progress" in recouping the
financial pain of its Russian exit, adding BP's latest results were an
"early indication of the company's ability to repair such damage".

The contrast is stark but inevitable. The same high oil and gas prices
emptying the pockets of consumers are filling those of the companies that
sell it.

BP's profit from April to June was triple the amount than last year and is
the second highest in the company's long history.

The company said it would increase its payments to shareholders by £3.6bn
in the next three months. Those shareholders include most pension funds
but these numbers sit uncomfortably alongside new estimates that average
annual energy bills will cost over £3,600 a year.

Insiders at BP and Shell, which announced record results last week, point
out that a couple of years ago, both companies were losing billions and
no-one was offering to subsidise their losses.

Both companies have profited from soaring internationally-set oil and gas
prices as a rise in post-Covid global demand has been exacerbated by
attempts to cut Russia out of the international energy market.



--
"LOCKDOWN", left-wing COVID fearmongering. 95% of COVID infections
recover with no after effects.

No collusion - Special Counsel Robert Swan Mueller III, March 2019.
Officially made Nancy Pelosi a two-time impeachment loser.

Donald J. Trump, cheated out of a second term by fraudulent "mail-in"
ballots. Report voter fraud: sf.n...@mail.house.gov

Thank you for cleaning up the disaster of the 2008-2017 Obama / Biden
fiasco, President Trump.

Under Barack Obama's leadership, the United States of America became the
The World According To Garp. Obama sold out heterosexuals for Hollywood
queer liberal democrat donors.

President Trump boosted the economy, reduced illegal invasions, appointed
dozens of judges and three SCOTUS justices.

[Terence Bean]

In article <lnsAEE76F6AC6...@0.0.0.1>, democrat-...@mail.house.gov says...

Apple beat that with over $50 billion. You would not think that there are that many stupid people in the world

The operative words are, "would not think" though.

The USA has some really dumb people in it.