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BP reports huge profits as energy bills soar

by August 2, 2022
August 2, 2022
BP reports huge profits as energy bills soar

BP has reported massive profits for the three months to June after oil and gas prices soared.

The energy giant saw underlying profits hit $8.45bn (£6.9bn) – more than triple the amount it made at the same time last year.

The figure is the second highest in the firm’s history and takes its half-year profits to $14.6bn.

It comes on the day typical household energy bills have been forecast to hit more than £3,600 a year this winter.

The figure is hundreds of pounds more than previously predicted, prompting calls for more support for families struggling with the cost of living.

Dr Craig Lowrey, principal consultant at Cornwall Insight, told the BBC’s Today programme that energy bills “at this point in time” looked set to stay high across 2023 and into 2024.

“This is very much a long-term problem for households and one which is going to need concerted and enduring action from the government to help manage that,” he said.

The government is introducing a package of measures to help households with the rising cost of living, such as a £400 discount on energy bills. However, there are calls for more support.

Dr Lowrey said the £400 would make a “dent” in higher bills but was “not going to offset this”.

BP’s profits were higher than expected and follow record profits from rival Shell and huge earnings from British Gas owner Centrica last week.

The huge increase in profits for firms has been fuelled by higher prices for oil and gas, which have risen sharply due to the war in Ukraine.

In recent months, Russia has reduced supplies to Europe following the invasion and fears are growing it may switch off the taps altogether.

The potential of gas supply problems have led to the wholesale price soaring, which has led to energy firms passing those costs onto customers – pushing up household energy bills by unprecedented amounts.

Following political pressure, the UK government announced in May that oil and gas firms would pay an extra 25% in tax on profits to help households with rising bills.

However, as the legalisation wasn’t formally introduced until July, the tax will not apply to profits announced by BP and others between April and June.

Higher oil prices have also led to the price of petrol and diesel reaching record highs at the pumps in recent months, although prices have started to fall slightly.

BP said following its bumper profit results that it would boost shareholder payouts by 10% as well as buy back shares as a result of its higher earnings.

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BP reports huge profits as energy bills soar

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