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 12 months, though this was down from $6.2bn final 12 months with oil costs having fallen from the height seen after Russia’s invasion of Ukraine.

Bumper income from vitality corporations have led to requires them to pay extra tax with households going through excessive payments.

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

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

BP reported report annual income final 12 months 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 massive income for vitality firms, but additionally fuelled an increase in vitality payments for households and companies.

Nick Butler, a former BP government and visiting professor at Kings School London, mentioned the robust outcomes had come “from an excellent inside enterprise efficiency but additionally from excessive costs around the globe”.

However he instructed the BBC’s In the present day programme the agency’s income have been prone to “come down rather a lot this 12 months” 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 12 months, the UK authorities launched a windfall tax on income comprised of extracting UK oil and fuel – referred to as the Vitality 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 corporations additionally pay 30% company tax on their income in addition to a supplementary 10% charge.

Together with the windfall tax, that takes their whole tax charge to 75%, though firms are in a position to cut 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 income – paid $650m (£520m) in tax between January and March, with about $300m as a result of EPL.

Because the EPL was launched final 12 months, BP says it has now paid a further $1bn in tax.

The value of Brent crude oil reached practically $128 a barrel following the invasion of Ukraine, however has fallen again since. Its value averaged $81 a barrel within the first three months of the 12 months, 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.

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

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