Shell announces all-time record annual profits of more than £32bn as energy bills soar

Another oil company announces record profits...

Shell has announced record annual profits of $39.9bn (£32.2bn). The London-listed company made more than £68bn in 2022, but once adjusted earnings are taken into account, this gave the company a profit of £32.2 billion. The profits also came thanks to bumper gas prices as Russia's invasion of Ukraine led countries to reduce their reliance on Russian fuel imports. The majority of profits came from Shell's gas operations, Sky News reports. Meanwhile, the average cost of an unleaded litre of petrol reached a record high of 191.5p in July, after the price of Brent crude oil reached nearly $128 a barrel following Russia's invasion. This has since fallen back to about $83, but companies have already managed to benefit from the period of soaring costs. Shell is just the latest energy company to announce record profits as prices rose in the wake of the war in Ukraine. [caption id="attachment_376414" align="alignnone" width="2048"] (Getty)[/caption] This week oil and gas company Exxon Mobil recorded net profit in 2022 of $56bn (£45.25bn), a record high for the entire Western oil industry. And in August last year, BP reported its second highest profits in its history. The company made $8.45bn (£6.95bn) in underlying profits for the second quarter of 2022, more than three times the amount it made in the same period the year before. The announcement about Shell's profits has sparked fury from politicians. Lib Dem leader Ed Davey labelled the "outrageous profits" as "another Tory failure," whilst Labour's shadow climate change secretary Ed Miliband said it is "only right that the companies making unexpected windfall profits from the proceeds of war pay their fair share." https://twitter.com/EdwardJDavey/status/1621045609192120321 https://twitter.com/Ed_Miliband/status/1621051052840685568 Shell chief executive Wael Sawan said: "Our results in Q4 and across the full year demonstrate the strength of Shell's differentiated portfolio, as well as our capacity to deliver vital energy to our customers in a volatile world. "We believe that Shell is well positioned to be the trusted partner through the energy transition. According to campaign group Global Witness, Shell's £33bn profit would be enough to pay the average annual energy bills for 13.2 million UK households – almost half of all households at a time when millions of Brits continue to face record gas and electricity bills. Shell’s profits could also cover the £28bn that the government estimates would be needed to give all public sector workers – including nurses, teachers, police and firefighters– raises in line with inflation

Jonathan Noronha-Gant, Global Witness, Senior Campaigner, said: “People have every right to be outraged at the enormous profits that Shell has made in the midst of an energy affordability crisis that has pushed millions of families into poverty.

"For those facing exorbitant energy bills, and for all of our nurses, firefighters and teachers on the picket line this week, Shell’s profits are an insult. Shell is richer because we’re poorer.

“If oil and gas companies were properly taxed, and if our government stopped handing them billions of pounds in the form of tax breaks and other subsidies – then that would free up the money that’s desperately needed to give Brits long-term support with the cost of their energy bills, and to give our key workers the financial recognition they deserve. But so far that hasn’t happened.

“So we have to ask ourselves – whose side is our government on? Are they on the side of those of us living in cold, draughty homes, or are they on the side of an industry that is riding the wave of the energy crisis in Europe and the war in Ukraine, and is wrecking the planet in the process? All in the name of enriching its shareholders.”

This has all come during a period in which consumers have had to deal with spiralling energy costs, which have contributed to soaring inflation. The industry has come under pressure as companies announce record profits whilst millions struggle to heat their homes. In May last year, the UK government announced a 25 percent windfall tax on the profits of energy firms to help fund its scheme to lower gas and electricity bills. Then, in his autumn statement, Chancellor Jeremy Hunt announced this would increase to 35 percent from January 2023 and stay in place until March 2028. But the scheme has been criticised by Labour because it allows firms to claim tax savings worth 91p of every £1 invested in fossil fuel extraction in the UK In January, Shell estimated those tax payments would cost the company around $2bn (£1.7bn) in the final three months of its financial year. In October last year, the chief executive of Shell implored the government to start taxing oil and gas companies in order to protect the poorest people in society from soaring energy costs. Related links:

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