BP’s Record Profits On Gas & Oil Prompt Calls for Windfall Tax – Would Anyone Truly Benefit?

jetcityimage / Getty Images

BP announced a record profit of $12.8 billion in 2021, from a loss of $5.7 billion the year before, after soaring gas and oil prices in the second half of the year. Bernard Looney, BP’s chief executive, has denied calls for a windfall tax on energy companies to help households struggling to pay their bills, The Guardian reported. 

See: Gas Prices: How Filling Up on Specific Days Could Save You $100 Annually
Find: Oil Moves Closer to $100 a Barrel — What Does It Mean for Gas Prices?

“Generally, a windfall tax on U.K. oil and gas producers would not encourage investment in producing the U.K.’s gas resources,” a BP spokesman declared, according to the BBC. “Very importantly, we also believe the U.K. should continue its [low carbon] energy transition as fast as possible. BP is committed to playing our part here.”

However, the UK’s Labour Party said it was “only fair and right” that energy firms making higher profits should pay more tax to help fund support for families in need. Liberal Democrat Leader Ed Davey said that a windfall tax is the best way to get money to these families quickly, the BBC added.

BP shareholders are in line for a $1.5 billion share buyback in the first quarter of 2022, according to The Guardian, but many households are seeing record energy prices which are set to be even higher by next winter due to a global pinch on gas supplies. Crude oil is priced at $90 per barrel, its highest level in years, GOBankingRates previously reported

Make Your Money Work Better for You

Looney told The Guardian that a windfall tax would do little to solve the energy supply crisis, which requires big investments in low-carbon energy sources. BBC noted that the company has already set to invest more than twice what it made in Britain in offshore wind, solar, hydrogen, carbon capture and storage and electric vehicle charging. 

See: Oil Prices Rise 1.7%, Hit 7-Year High as Omicron Variant Fails to Reduce Gas Consumption
Find: Oil Could Soar to $100 in 2022 If Supply Can’t Outpace Demand

“A windfall tax could deter £14bn worth of opportunities awaiting investment, which would risk both security of our energy supply, as well as almost 200,000 jobs that rely on the industry,” a U.K. Treasury spokesperson said, as reported by BBC. 

More from GOBankingRates: