The rise in oil prices and fuel prices due to the ongoing Russia-Ukraine war has affected millions of people around the world and people who are experiencing an increase in the cost of living. But others benefit from it, especially energy firms.
BP on Tuesday (November 1) reported a third-quarter profit of $8.15 billion, which doubled its profit in the period between July and September last year. Apparently, BP made a profit of $3.3 billion a year earlier. In the second quarter of 2022, it made a 14-year profit of $8.45 billion.
Not just BP, but other Western energy giants have reported huge profits, including Shell, Exxon Mobil and Total Energies PA. This has fueled calls to impose wind tariffs on energy firms to help governments.
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The UK’s economic crisis
The United Kingdom is facing an economic crisis that has left the country’s financial situation in dire straits. Millions of people across the country are struggling with their high food and energy bills.
A few days ago, Rishi Sunak became the prime minister of Britain and when he was prime minister, he introduced the air tax in May. As quoted by a BBC report, a Treasury spokesman said the tax is expected to raise £17bn this year and next “to help support the cost of living for eight million people”.
The same report also quoted Ed Miliband, the climate change secretary, as saying that BP’s profits were “severe evidence of the government’s failure to levy a fair tax on air”.
He said, “Rishi Sunak should hang his head in shame for leaving billions in windfall profits in the pockets of oil and gas companies, while the British people face a cost of living crisis.”
In a tweet, Alok Sharma, COP UK president, said: “We need to raise more windfall tax on oil and gas companies and encourage them to reinvest.”
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The earnings reports came a day after US President Joe Biden called on oil and gas companies to use their record profits to cut costs for Americans and boost production.
Amid higher pump prices, Biden also warned companies that they may have to pay higher taxes. High gasoline prices are one of the main factors in the US midterm elections coming up next week.
Biden on Monday (October 31) criticized the big oil companies in statements at the White House.
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He said the oil industry “has not met its commitment to invest in America and support the American people.” They just don’t make “fair returns” he said, adding that they make “profits so high it’s hard to believe”.
“Their advantage is air war,” Biden said, referring to the Russia-Ukraine war.
The US president also said he thought it was “outrageous” that if they passed those benefits on to consumers, gasoline prices would be about 50 cents lower.
“If they don’t do that, they will pay higher taxes on their excess income, and face other restrictions,” he said.
Meanwhile, the White House will work with Congress to explore these and other options. “It’s time for these companies to stop profiting from war,” Biden added.
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