BP chief government Bernard Looney has stated it will be laborious to chop gasoline costs for UK motorists any quicker after the federal government’s windfall tax, regardless of the oil main reporting its highest quarterly revenue in 14 years.
Costs at BP’s UK forecourts have fallen by as a lot as 6p a litre from a peak earlier this yr as crude oil has dipped. However Looney stated that it will be troublesome to comply with France’s TotalEnergies, which has pledged to intervene with a sequence of value cuts for French motorists from September.
“Completely different nations are selecting completely different approaches to the way to deal with the price of dwelling disaster,” Looney advised the Monetary Occasions, noting that France, not like the UK, had not elevated taxes on power corporations because the begin of the disaster.
“Our tax invoice shall be considerably greater right here in Britain than what it will in any other case have been and it’s clearly now for the federal government to determine the way to allocate the revenues from that extra tax to assist assist these greatest in want.”
The UK authorities launched a levy on the income of North Sea oil and fuel producers in Could, because it confronted mounting stress to handle rising power payments for shoppers. BP stated the levy would enhance its tax invoice within the UK past the £1.25bn it had already anticipated to pay this yr.
The feedback from Looney come after Centrica, the proprietor of British Fuel, final week known as on the UK authorities to assist households hit by the power disaster.
BP’s underlying income surged to $8.5bn within the second quarter, exceeding analysts’ estimates of $6.8bn and greater than tripling the $2.8bn that the group made in the identical interval a yr earlier. Shares in BP climbed 3 per cent in early afternoon buying and selling.
The group’s outcomes cap a sequence of record-breaking earnings for among the world’s greatest oil and fuel corporations, a increase that’s more likely to spark calls in some nations for one more spherical of tax will increase on the sector. US giants ExxonMobil and Chevron reported file second-quarter income of $17.9bn and $11.6bn respectively, whereas Shell broke its revenue file for a second consecutive quarter, producing $11.5bn in adjusted earnings.
Looney, who took the highest job in 2020 with a dedication to transition BP from fossil fuels to renewables, stated he understood that many individuals have been beneath “intense monetary stress”. One of the simplest ways for corporations corresponding to BP to assist was to spend money on offering safer, extra reasonably priced, decrease carbon types of power, he added. “Our job is to assist remedy that power trilemma.”
BP in Could outlined £18bn of deliberate investments within the UK this decade in a failed try to go off requires a windfall tax. On Tuesday, it laid out among the investments, saying it had submitted an environmental assertion for the event of the Murlach oil and fuel venture within the North Sea and made progress with a number of different tasks in wind energy and electrical automobile charging.
Former chancellor Rishi Sunak launched the power income levy, however overseas secretary Liz Truss, his rival to develop into the following UK prime minister, has rejected the concept of accelerating its scale or scope.
“I don’t imagine in windfall taxes,” she advised a Tory hustings assembly in Leeds final week. “What we must be doing is encouraging Shell and different corporations to spend money on the UK as a result of we have to get our productiveness up.”
Vitality payments are set to rise additional this winter. Britain’s power value cap will enhance by an additional 70 per cent to greater than £3,358 in October and exceed greater than £3,600 a yr in January, in response to forecasts printed on Tuesday by the power consultancy.
Motoring group RAC stated petrol costs had begun to fall from a file of £1.92 a litre initially of July, however have been nonetheless not dropping quick sufficient and known as on the federal government to ship an additional 10p per litre lower in gasoline responsibility.
BP stated its quarterly income have been pushed by “sturdy” refining margins and “persevering with distinctive oil buying and selling efficiency”. Like its European rivals Shell and Whole, BP doesn’t escape the efficiency of its buying and selling items however they’ve develop into constant performers.
The BP unit that refines and trades oil reported earnings earlier than curiosity, taxes, depreciation and amortisation of $3.7bn, up from $2.03bn within the earlier quarter.
“The motive force of the big beat was one other distinctive quarter of oil merchandise buying and selling,” stated Biraj Borkhataria, an analyst at RBC Capital Markets.
BP lifted its dividend by 10 per cent to $0.06 a share, greater than it had beforehand guided, and dedicated to purchasing again $3.5bn of inventory within the third quarter after finishing $2.5bn of buybacks between April and July.
Further reporting from Nathalie Thomas, George Parker and David Sheppard
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