Nov 01, 2022
The London-based oil and gas giant BP reported Tuesday that it brought in a staggering $8.2 billion in profits in the third quarter, more than doubling its total from the same period last year amid Europe's worsening cost-of-living crisis.
The company announced it will be using its banner profits to buy back $2.5 billion worth of its own stock, rewarding shareholders as millions of people across the United Kingdom are having trouble heating their homes ahead of the winter season. According to the Financial Times, BP has repurchased more than $10 billion of its shares this year.
"While fossil fuel companies are being allowed to make record-breaking profits, households are facing astronomical energy bills."
The advocacy group Global Witness estimates that BP's $27 billion in profits over the past 12 months could pay the energy bills of 9.4 million U.K. households.
"Big fossil fuel firms making eyewatering profits is a slap in the face for the millions of citizens struggling to heat their homes, cook their meals, or buy everyday essentials," said Jonathan Noronha-Gant, senior fossil fuels campaigner at Global Witness. "As winter fast approaches, a dividing line is emerging: whose side is the government on? Brits facing financial hardships or an industry that's making billions in profits off the current energy crisis?"
The U.K.'s conservative government unveiled a windfall profits tax on energy companies in May, but it has thus far had little impact on oil giants. Shell reported last week that it has paid nothing in windfall taxes in the country, and BP said Tuesday that it expects to fork over $800 million--a fraction of the gains it has reaped from global energy market chaos spurred by Russia's war on Ukraine.
BP's latest earnings announcement sparked calls for a more aggressive windfall tax as Jeremy Hunt, the U.K.'s chancellor of the Exchequer, is expected to unveil a new economic plan later this month. The Guardianreported that Hunt is "considering increasing the windfall tax by up to five percentage points, to 30%, and extending its lifespan by three years, to 2028."
The government of new right-wing Prime Minister Rishi Sunak is also facing pressure to reverse plans for deep public spending cuts, which could be devastating for millions of people across the country.
\u201c\u00a37.1 billion profits in just 3 months for fossil fuel giants like BP. Austerity 2.0, devastating public spending cuts and miserly, well-below-inflation pay rises for the country. Yet Rishi Sunak is wilfully letting this happen. We need a proper, loophole-free, windfall tax NOW\u201d— Caroline Lucas (@Caroline Lucas) 1667289023
Freya Aitchison, oil and gas campaigner at Friends of the Earth Scotland, said in a statement that "the announcement of yet another obscene profit for a climate-wrecking oil firm highlights the scale of the pain that these companies are inflicting on the public."
"While fossil fuel companies are being allowed to make record-breaking profits, households are facing astronomical energy bills and millions are being pushed into fuel poverty," said Aitchison. "Bosses and shareholders at these big polluters are being allowed to get even richer by exploiting one of our most basic needs. BP is also worsening climate breakdown and extreme weather by continuing to invest and lock us into new oil and gas projects for decades to come."
BP's profit report came just hours after U.S. President Joe Biden warned fossil fuel giants that he's prepared to support a windfall profits tax if the companies continue gorging on their own stock while refusing to lower costs for consumers.
"Oil companies' record profits today are not because they're doing something new or innovative," Biden said in a speech at the White House on Monday. "Their profits are a windfall of war."
Murray Auchincloss, BP's chief financial officer, declined to comment on Biden's speech when pressed by Reuters.
In a statement Tuesday, Daniel Willis of the U.K.-based advocacy group Global Justice Now noted that Chevron, ExxonMobil, BP, Shell, and TotalEnergies have announced combined profits of more than $170 billion this year.
"To put this into perspective, that is more than the $116 billion a year that loss and damage are estimated to cost the Global South, to date," Willis said. "It doesn't take much to connect the dots to see what's happening here. When fossil fuel companies are announcing record profits just days before COP27, it's high time leaders joined those dots once and for all too and make polluters pay up for loss and damage. It's clear they can afford to, and a polluter tax could help reduce household energy bills closer to home as well."
"People here and the Global South have one thing in common when it comes to companies like BP: they're ripping us off and think they can keep getting away with it at the expense of people and the planet," Willis added. "It's high time we showed them the game is up."
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