BP’s profit booms to £4bn with Labour slamming it as ‘unearned’ and ‘at the expense of British families’

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Ed Miliband said the oil giants profit for the first three months of the year is “unearned” and Labour would bring in a “proper” windfall tax

Oil giant BP has reached a profit close to £4 billion in the first three months of the year, significantly beating analysts expectations, the group revealed.

On Tuesday (2 May) bosses said BP had made an underlying replacement cost profit. the measure that analysts most closely track, of $4.96 billion (£4 billion).

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It represents the second-best results for the first quarter since 2012 when it made $4.7 billion, behind last year’s $6.2 billion.

The company increased its dividend, and said it would reward investors, buying back $1.75 billion of its own shares.

The result will reignite a debate over windfall gains by oil and gas firms, putting the question back on the line over whether the girls should face a harsher windfall tax on their profits.

On Monday night (1 May) Labour called for the energy profits levy, introduced last year, to be made tougher to fund a freeze on council tax for cash-strapped households.

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Ed Miliband MP, Labour’s Shadow Energy and Net Zero Secretary, responded to BP’s profits saying they are “unearned” and “at the expense of British families”.

He said: “These enormous profits are the unearned, unexpected windfalls of war. And every excess pound that the energy giants rake in is at the expense of British families.

“Yet after all this time, the Tory windfall tax is still full of get out clauses with billions being bunged at oil and gas companies in special subsidies not available in any other part of the energy sector.”

BP profit rises to £4bn ‘at expense of British families’, Labour says. (Photo: Getty Images) BP profit rises to £4bn ‘at expense of British families’, Labour says. (Photo: Getty Images)
BP profit rises to £4bn ‘at expense of British families’, Labour says. (Photo: Getty Images) | Getty Images

He added that Labour would “bring in a proper windfall tax on oil and gas giants to help freeze council tax this year” because it is “on the side of working people unlike the Conservative Party.”

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The government has responded by pointing to its current windfall tax, which Chancellor Jeremy Hunt already made more onerous in his autumn statement.

BP said it had incurred $3.4bn of taxes worldwide during the quarter, including $650m on its UK North Sea business.

Joseph Evans, researcher at IPPR, said: “BP continues to profit from the cost-of-living crisis. While some UK households spent the winter facing the bleak choice between heating or eating, BP continued to exploit geopolitical fallout from war in Ukraine - driving up prices and profits.

“Instead of using these profits to invest in net-zero or reduce costs for consumers, BP is transferring an outrageous sum of wealth from ordinary households to their investors. The USA and Canada have already taken action on excessive shareholder payouts: it’s long overdue for the government to follow suit by introducing a tax on share buyback schemes.”

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Oil and gas prices have fallen back since last summer when commodity prices rose sharply after Russia’s invasion of Ukraine.

Concerns over the health of the global economy have weighed on oil prices, while gas prices have eased after a mild winter.

However, gas prices remain well ahead of where they were before the onset of the energy crisis in 2021.

This means consumer gas and electricity bills are expected to remain higher than historic averages for at least the remainder of the year.

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BP has recently been slammed by climate activists after it announced it will be scaling back its climate goals earlier this year.

Last week, climate protesters disrupted BP’s annual general meeting where the oil company faced a backlash from some shareholders over the weaker climate commitments.

Meanwhile, US oil companies ExxonMobil and rival Chevron also announced their booming profits last week.

Britain’s Shell will report on its first-quarter trading on Thursday (4 May). lt is expected to report adjusted earnings of 7.965 billion dollars for the first quarter which will be a reduction from the £9.1 billion it made a year earlier.

The increase in profits has helped companies recover from the impact of lockdowns during the Covid pandemic which sent demand for fuel plunging.

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