The continuous surge in oil and fuel prices due to the ongoing Russia-Ukraine war impacted millions globally with people coping with a rise in the cost of living. But some are also profiting from it, especially the energy firms.
BP on Tuesday (November 1) reported a third-quarter profit of $8.15 billion, which is more than double its profit for the period between July and September last year. Notably, BP made a profit of $3.3 billion a year earlier. In the second quarter of 2022, it made a 14-year high profit of $8.45 billion.
Not just BP, but several other top Western energy giants have reported huge profits, including Shell, Exxon Mobil and Total Energies PA. This revived calls of imposing new windfall taxes on the energy firms to help the governments.
UK economic crisis
The United Kingdom is facing an economic crisis that has left the nation’s finances in a precarious state. Millions of people across the nation are struggling with their high food and energy bills.
A few days ago, Rishi Sunak became Britain’s prime minister and when he was chancellor, he introduced the windfall tax in May. As quoted by a BBC report, a Treasury spokesperson said the tax was expected to raise £17bn this year and next “to help fund cost of living support for eight million people”.
The same report also quoted Ed Miliband, shadow climate change secretary, as saying that BP’s profits were “damning evidence of the failure of the government to levy a proper windfall tax”.
He said, “Rishi Sunak should be hanging his head in shame that he has left billions of windfall profits in the pockets of oil and gas companies, while the British people face a cost-of-living crisis.”
In a tweet, Alok Sharma, who is UK’s COP president, noted: “We need to raise more money from a windfall tax on oil and gas companies and actively encourage them to invest in renewables.”
The profit reports came a day after US President Joe Biden asked the oil and gas companies to use their record profits to lower costs for Americans and increase production.
Amid high pump prices, Biden also warned the companies that they might have to pay a higher tax rate. elevated fuel prices are one of the top issues in the US midterm elections coming in a week.
Biden on Monday (October 31) criticised major oil companies in remarks at the White House.
He said that the oil industry “has not met its commitment to invest in America and support the American people.” They’re not just making a “fair return” he said, adding that they’re making “profits so high it is hard to believe”.
“Their profits are a windfall of war,” Biden said referring to the Russia-Ukraine war.
The US president also said that he thinks it’s “outrageous” as if they passed those profits on to consumers, gasoline prices would be down about 50 cents.
“If they don’t, they’re going to pay a higher tax on their excess profits, and face other restrictions,” he said.
unkindwhile, the White House will work with Congress to look at these options and others. “It’s time for these companies to stop war profiteering,” Biden added.
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