Energy giant Shell reported record earnings in the first quarter after soaring oil prices
Shell reports record earnings in the first quarter as oil prices rise. By DANICA KIRKAA Associated Press Associated Press LONDON
LONDON (AP) – Energy giant Shell reported record earnings in the first quarter following a jump in oil prices, prompting calls for the British government to introduce a tax on unexpected earnings by energy companies to help consumers struggle with rising living costs.
London-based Shell said adjusted earnings – which excludes one-off items and fluctuations in inventory value – rose to $ 9.1 billion from $ 3.2 billion in the same period last year. That exceeded analysts’ expectations of $ 8.2 billion.
High oil and gas prices, in part due to uncertainty over supplies from Russia, are boosting the profits of large energy companies and boosting inflation around the world. In Britain, where households are facing the biggest drop in living standards so far, this has triggered demands for a special payroll tax on energy companies to help consumers.
Prime Minister Boris Johnson on Wednesday rejected calls for a tax on unexpected profits, saying it would reduce investment in Britain at a time when the country is trying to diversify its energy industry and increase production from renewable sources. But opposition parties have stepped up pressure following Shell’s earnings report.
The government’s “refusal to tax the super-profits of energy companies is completely unforgivable when people are too scared to heat their homes,” said Ed Davey, leader of the Liberal Democrats. “This one-off tax would raise billions of pounds that could now help vulnerable families with their energy bills. It’s simple. “
Brent crude, the benchmark for global oil prices, averaged $ 102.23 a barrel in the first quarter, 67% more than in the same period last year.
The British media is full of stories of people being forced to skip meals or borrow while struggling to heat their homes after a 54% increase in energy prices in households took effect on 1 April. Even before those increases, inflation accelerated to a 30-year high of 7% in March.
Shell rival BP on Tuesday reported the highest quarterly profit in more than a decade. The London-based company said adjusted earnings rose to $ 6.2 billion in the first quarter, from $ 2.6 billion in the same period last year.
Michael Hewson, chief market analyst at CMC Markets UK, criticized politicians for their “size” with calls for an unexpected profit tax, noting that Shell announced plans last month to invest £ 25bn ($ 31bn) in renewables in the UK. Britain. a commitment to invest £ 18bn in British energy this week.
“That’s a lot more than it would increase the income tax and it would probably be better to spend it,” Hewson said.
Shell said on Thursday that $ 3.9 billion would have to be collected to cover the cost of giving up investing in Russia, which he pledged to do after the invasion of Ukraine.
Net income in the first quarter, which includes such one-off items, rose to $ 7.3 billion from $ 5.8 billion in the same period last year.
“The war in Ukraine is primarily a human tragedy, but it has also caused significant disruption in global energy markets and shown that secure, reliable and affordable energy simply cannot be taken for granted,” CEO Ben van Beurden said in a statement. “We work with governments, our customers and suppliers to address challenging implications and provide support and solutions where we can.”