BP posts profits of £4 billion in three months sparking criticism
BP has reported more profits of $5 billion (£4 billion) for the first quarter of 2023 – a decrease from $6.2 billion in the same period last year.
BP said the profits were due to “strong performance” across its oil and gas trading divisions and gas marketing and trading in particular.
The results follow record annual profits for the company in 2022 as energy prices surged after Russia’s invasion of Ukraine.
The profits, which sit alongside similar results from other energy firms, have led to calls for the companies to pay higher taxes, particularly a windfall tax, with households struggling to pay high energy bills.
Labour Party leader Sir Keir Starmer told the BBC: “Of course we want BP and others to make profits so they can invest but these are profits that they didn’t expect to make, these are profits that are over and above because the world price of energy is so high,”.
Both the Labour and Liberal Democrat parties have demanded changes to the Energy Profits Levy, introduced by the UK government last year, which charges companies a 35 percent tax on profits from extracting UK oil and gas.
BP paid approximately $300 million under the levy during the first quarter of 2023.
BP has also faced criticism over its environmental record, including after cutting back its target to reduce emissions by the end of the decade.
At the company’s recent annual general meeting, some of the UK’s largest pension funds voted against reappointing BP’s chairman, Helge Lund, over the decision.
Liberal Democrat leader Ed Davey said: “These eye-watering profits are a kick in the teeth for all those struggling to pay their energy bills.”
He added that the government had “let oil and gas giants off the hook for billions of pounds while people and businesses struggle to pay for their gas and electricity”.’
A Treasury spokesperson said: “Through the Energy Profits Levy we are ensuring excess energy profits… are being used to ease the pressure on families up and down the country.
“These funds are being used to hold down people’s energy bills and fund one of the most generous cost of living packages in the world- worth £94bn which is around £3,300 per household this year and last.”
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BP’s profits are expected to fall throughout the year as oil and gas prices are predicted to drop.
Brent crude oil, which reached a high of nearly $128 per barrel after the Ukraine invasion, has fallen back to around $80 per barrel.
Wholesale gas prices have also been decreasing, raising hopes that energy bills will start to fall.
Under the UK government’s Energy Price Guarantee, household energy bills are capped at £2,500 per year, although the scheme is set to end at the end of June.
Experts predict bills will fall below this level in July due to falling wholesale costs, rendering the price guarantee redundant.