BP’s profits treble to £7bn as households battle to pay fuel bills
BP triggered a profiteering row yesterday as the company cashed in on soaring fuel prices to treble profits to a 14-year-high.
The oil and gas giant reported profits of £6.9billion for the three months to June 30 – up from £2.3billion in the same period last year.
The increase came against the background of warnings that household energy bills are set to remain at more than two-and-a-half times their pre-crisis levels until at least 2024.
Cornwall Insight, one of the country’s most respected energy consultancies, said bills will hit £3,359 per year from October for the average household, and will not fall below that level until at least the end of next year.
The price cap on energy bills, which regulates what 24million British households pay, will hit £3,616 from January and rise further to £3,729 from April.
It will begin to fall after that, but only slowly, reaching £3,569 from July before hitting £3,470 for the last three months of 2023, the analysis said.
The latest price cap predictions are hundreds of pounds above previous forecasts from Cornwall Insight, but are slightly lower what another consultancy, BFY, has predicted.
Bosses at BP plan to give away £3billion of its profits to shareholders over the next three months as millions suffer the biggest cost of living squeeze since the 1950s.
Last November BP’s 52-year-old chief executive Bernard Looney described the company as a ‘cash machine’. His own pay has almost doubled to nearly £4.5million. The profits at BP mirror similar stellar results for Shell, Centrica – the owner of British Gas – the French company Total Energies and Exxon Mobile of the USA.
The firms are cashing in from Russia’s invasion of Ukraine, which has pushed up the wholesale cost of gas and oil way beyond what any of the companies could have expected.
Last week British Gas owner Centrica reported half-year profits of £1.34billion, five times higher than a year earlier. Meanwhile, Shell reported record quarterly profits of nearly £10billion between April and June.
The revelations have triggered calls for new taxes on windfall profits to raise funds to support the poorest households.
The situation throws up a point of difference in the Conservative leadership race. As chancellor, Rishi Sunak set out a £5billion windfall tax on energy giants to fund subsidies of up to £1,200 for poor households.
But Liz Truss says she is opposed to windfall taxes. Yesterday her supporter Jacob Rees-Mogg said: ‘You need a profitable oil sector so it can invest in extracting energy.’
Greenpeace and Friends of the
Earth, as well as Labour and the Liberal Democrats, say that the huge profits justify an even bigger windfall tax than the one announced so far.
The boss of the green energy firm Ecotricity, Dale Vince, said oil and gas giants are ‘holding a shedload of money that simply is coming from hard-pressed bill-payers’. Rachel Reeves, the shadow chancellor, said: ‘People are worried sick about energy prices rising again in the autumn, but yet again we see eye-watering profits for oil and gas producers.’
Mr Looney, who took over BP in February 2020, said: ‘ In terms of cost of living, we all have to recognise it is a very difficult place for people... we understand that, we get it.’
He said the firm is using its profits to invest in renewable energy. However, it will also be spending an extra £410million on new gas and oil fields to cope with the energy crunch caused by Russia.
÷ Research by the RAC says petrol retailers are failing to pass on falls in fuel prices. The motoring group said the wholesale figure for unleaded petrol suggests that the pump price should be around 167p a litre, however drivers are being charged around 183p.
‘A shedload of money’