British Prime Minister Boris Johnson’s conservative government came under fire Tuesday for its refusal to impose a windfall tax on oil and gas giants after BP posted its highest quarterly earnings in more than a decade.
London-based energy company, headquartered in London, announced an underlying profit of $6.2 Billion for the first three month of 2022. This is significantly higher than the $2.6 billion it posted last year. It also beat the $4.5 billion market analysts expected.
BP attributed the profit to “exceptional oil and gas trading, higher oil realizations, and a stronger refining result,” and announced plans to buy back an additional $2.5 billion in shares.
The company also stated that it had reduced its stake in Russia of $25 billion to zero. The Guardian reportedLast week:
Looked at one way, that’s a lot of money. Looked at another, it’s practically chicken feed for a company that absorbed £50bn of costs from its 2010 Deepwater Horizon oil spill and lived to tell the tale. Moreover, the loss might have been more painful if it weren’t for the fact that oil companies have been making out like bandits due to sky-high oil and gas prices.
While Chancellor for the Exchequer Rishi Sunak suggested last week that a windfall tax on energy companies could happen if the firms “are not going to make… investments in our country and energy security,” business secretary Kwasi Kwarteng made clear that he’s “never been a supporter of windfall taxes,” declaring, “I think it discourages investment.”
In an interview following BP’s posting, the prime minister doubled down on that assertion.
“Good Morning Britain” host Susanna Reid pressed Johnson about his refusal to support a windfall tax on energy companies to help U.K. households facing soaring prices for food, petrol, and other necessities.
‘You say you’re doing everything you can. You’re not.’@susannareid100Boris Johnson asked Boris Johnson if it was possible to get in touch with the people affected by the cost of living crisis.
Susanna asks the PM why he can’t impose a windfall tax on fuel companies. pic.twitter.com/AUeZIvMJld
— Good Morning Britain (@GMB) May 3, 2022
“If you put a windfall tax on the energy companies,” the prime minister claimed, “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.”
But Ed Miliband, the opposition Labour Party’s climate secretary and an MP for Doncaster North, took issue with Johnson’s assertion.
The “government claims that the massive profits windfall is going to investment,” Miliband tweeted. “BP tells us in black and white that’s wrong — they say 60% is going to share buybacks.”
“Refusing a windfall tax is a political choice which shows the Tories aren’t on the side of the British people,” he added.
Green MP for Brighton Pavilion Caroline Lucas similarly criticized Johnson’s rejection of a windfall tax.
“Soaring gas prices mean BP profits of $6.2bn in first three months of 2022, while millions struggle to make ends meet,” she tweeted.
Lucas added that the government’s “refusal to levy a windfall tax on obscene profits and support those with huge energy bills shows whose side they’re on — it’s grotesque.”
Climate criticism was also a source of criticism campaignersFriends of the Earth
“It’s astonishing,” said FOE energy campaigner Sana Yusuf, “that companies like BP are allowed to rake in huge profits while people up and down the country are struggling with soaring energy bills.”
Sunak was also urged by her to create a windfall tax to finance investment in a national energy efficiency programme.
“A street-by-street insulation program — targeting the hardest hit first — would lower bills, help manage energy demand, and improve energy security,” she said. “With profits like this,” she added, “it would be short-sighted to do anything less.”
Although the U.S. has not responded to progressive lawmakers and groups calling for a windfall oil and gas tax, Italy increased its windfall taxes on profits of energy companies from 10% to 25% this week.