Energy / Carmichael says government needs to ‘rethink’ windfall tax after BP’s £7bn profit
NORTHERN Isles MP Alistair Carmichael has called for a “rethink” on the oil and gas windfall tax after BP reported global profits of more than £7 billion between July and September.
He said that BP is “posting unimaginable profits while families and pensioners here and across the country struggle to pay their energy bills makes a mockery of the government’s soft touch”.
The company is reported as saying it expects to pay about $800 million (£695 million) in windfall tax on its North Sea operations this year.
BP has interests to the west of Shetland, such as the Clair oil field, which is connected by pipeline to Sullom Voe Terminal.
The cost of oil and gas has risen significantly, leading to calls for producers to pay more in tax as the cost of living crisis bites people across the country.
In May then chancellor Rishi Sunak announced an energy profits levy – or windfall tax – on companies’ profits from extracting UK oil and gas. It was described at the time as a “new 25 per cent surcharge on the extraordinary profits the oil and gas sector is making”.
But Carmichael said BP’s latest profits “demonstrate the complete and utter incompetence of this Conservative government” and suggested more needs to be done.
The company’s profits for July to September are more than double what it made in the same period last year.
“In the isles we know more than most the benefit of working with energy companies to ensure growth and jobs for the future,” the Liberal Democrat said.
“When energy companies are using their profits to buy back their own shares, however, it rather suggests that there is more that we can be doing on tax.
“It is past time that we saw a rethink on the windfall tax to ensure that massive, unexpected profits for energy firms benefitting from price rises can be used to support those suffering from fuel poverty here and now.
“The government needs to take the opportunity of the coming fiscal statement to change course.”
Tessa Khan of energy thinktank Uplift added: “BP’s soaring profits are not because of anything it has done, but because of the surge in gas prices caused by the Ukraine war. BP must be laughing all the way to the bank.
“While oil and gas giants like BP are making these obscene profits, seven million UK households face fuel poverty this winter. The government must stop sitting on its hands and claw some of this money back to help families keep the heat on.
BP chief executive officer Bernard Looney said: “This quarter’s results reflect us continuing to perform while transforming.
“We remain focused on helping to solve the energy trilemma – secure, affordable and lower carbon energy.
“We are providing the oil and gas the world needs today – while at the same time – investing to accelerate the energy transition.”
Fellow energy company Shell recently said it has not paid any windfall tax because no profits were made in the UK following investment. However, globally it made profits of £8.2 billion between July and September.
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