Bumper BP profits of £4bn in three months spark fierce criticism

Oil and fuel large BP has reported one other set of robust outcomes as vitality costs stay excessive.

Income hit $5bn (£4bn) within the first three months of the yr, though this was down from $6.2bn final yr with oil costs having fallen from the height seen after Russia’s invasion of Ukraine.

Bumper earnings from vitality companies have led to requires them to pay extra tax with households dealing with excessive payments.

Labour referred to as for a “correct” windfall tax on vitality earnings.

“In fact we wish BP and others to make earnings to allow them to make investments however these are earnings that they didn’t count on to make, these are earnings which are over and above as a result of the world worth of vitality is so excessive,” Labour chief Sir Keir Starmer informed BBC Breakfast.

BP reported document annual earnings final yr as the corporate – together with the remainder of the vitality sector – benefitted from the surge in oil and fuel costs following Russia’s invasion of Ukraine.

It has led to huge earnings for vitality corporations, but in addition fuelled an increase in vitality payments for households and companies.

Nick Butler, a former BP government and visiting professor at Kings Faculty London, mentioned the robust outcomes had come “from a very good inner enterprise efficiency but in addition from excessive costs world wide”.

However he informed the BBC’s Right now programme the agency’s earnings have been prone to “come down rather a lot this yr” as oil and fuel costs have been falling again.

“That may have an effect on the income they get and the taxes they pay.”

Final yr, the UK authorities launched a windfall tax on earnings constituted of extracting UK oil and fuel – referred to as the Power Income Levy (EPL) – to assist fund its scheme to decrease fuel and electrical energy payments.

The UK’s windfall tax charge is 35%. Oil and fuel companies additionally pay 30% company tax on their earnings in addition to a supplementary 10% charge.

Together with the windfall tax, that takes their complete tax charge to 75%, though corporations are in a position to scale back the quantity of tax they pay by factoring in losses or spending on issues like decommissioning North Sea oil platforms.

BP mentioned its UK enterprise – which accounts for lower than 10% of its international earnings – paid $650m (£520m) in tax between January and March, with about $300m because of the EPL.

Because the EPL was launched final yr, BP says it has now paid an extra $1bn in tax.

The worth of Brent crude oil reached practically $128 a barrel following the invasion of Ukraine, however has fallen again since. Its worth averaged $81 a barrel within the first three months of the yr, which was down 16% from the identical interval in 2022.

Wholesale fuel costs have additionally began to fall, which has raised hopes that family payments will begin to come down this summer season.

Nonetheless, BP mentioned it anticipated oil costs to stay “elevated” within the second quarter given the current resolution by some oil producing nations to limit output in addition to rising demand from China.

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