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BP says hard to cut fuel prices for motorists despite surging profits

BP chief executive Bernard Looney said it would be difficult to lower fuel prices for UK motorists more quickly after the government’s heavy tax, even though the oil major reported its highest quarterly profit in 14 years.

Prices b BPUK forecourts fell 6p a liter from a peak earlier this year, following the dip in crude oil. But Looney said it would be difficult to follow France’s TotalEnergies, which has pledged to intervene in a series of Reduced prices for French drivers from September.

“Different countries are choosing different approaches on how to deal with the cost of living crisis,” Looney told the Financial Times, noting that France, unlike Britain, has not increased taxes on energy companies since the beginning of the crisis.

“Our tax bill will be significantly higher here in the UK than it would otherwise be, and it is clear that the Government will now decide how to allocate the revenue from this extra tax to help support those most in need.”

The British government introduced a levy on the profits of North Sea oil and gas producers in May as it faced increasing pressure to deal with rising energy bills for consumers. BP said the levy would increase its UK tax bill beyond the £1.25bn it already expected to pay this year.

Maloney’s comments come after Centrica, the owner of British Gas, last week called on the UK government to support households affected by the energy crisis.

BP’s underlying profits jumped to $8.5 billion in the second quarter, beating analysts’ estimates of $6.8 billion and more than a third of the $2.8 billion the group earned in the same period last year. BP shares climbed 3% in early afternoon trading.

The group’s results cover a series of record-breaking profits by some of the world’s largest oil and gas companies, a boom that could spark calls in some countries for another round of tax increases on the sector. The American giants ExxonMobil and Chevron Reported record profits in the second quarter of $17.9 billion and $11.6 billion respectively, while Shell broke its profit record for the second quarter in a row, generating adjusted profits of $11.5 billion.

Loney, who took the top job in 2020 with a commitment to transition BP from fossil fuels to renewable energy, said he realized many people were under “intense financial pressure”. The best way for companies like BP to help was to invest in providing safer, more affordable and lower-carbon forms of energy, he added. “Our job is to help solve this energy trilemma.”

BP in May unveiled £18bn of planned investment in the UK this decade, in a failed attempt to fend off calls for a progressive tax. On Tuesday it released some of the investments, saying it had submitted an environmental statement for the development of the Murlach oil and gas project in the North Sea and was moving ahead with several other wind energy projects. and charging electric vehicles.

Former chancellor Rishi Sonk introduced the energy profits levy, but foreign secretary Liz Truss, his rival to become the next UK prime minister, rejected the idea of ​​increasing its scope or scope.

“I don’t believe in spirit taxes,” she said at a turnabout meeting in Leeds last week. “What we need to do is encourage Shell and other companies to invest in Britain because we need to raise our productivity.”

Energy bills are expected to rise even more this coming winter. Britain’s energy price cap will increase by a further 70% to more than £3,358 in October and top out at more than £3,600 for the year in January, according to forecasts published on Tuesday by energy consultancy Cornwall Insight.

The motoring group RAC said fuel prices had started to fall from a peak of £1.92 a liter at the start of July, but had not yet fallen fast enough and called on the government to cut fuel tax by another 10p a liter.

BP said its quarterly earnings were driven by “strong” refining margins and “continued exceptional oil trading performance”. Like its European rivals Shell and Total, BP is not breaking out the performance of its trading units, but they have become consistent performers.

The BP unit that refines and trades oil reported earnings before interest, taxes, depreciation and amortization of $3.7 billion, compared to $2.03 billion in the previous quarter.

“The driver of the big pace was another exceptional quarter of oil commodity trading,” said Biraj Borkhataria, analyst at RBC Capital Markets.

BP raised its dividend by 10% to $0.06 a share, higher than it had previously guided, and pledged to buy back $3.5 billion of shares in the third quarter after completing $2.5 billion in buybacks between April and July.

Additional reporting by Natalie Thomas, George Parker and David Shepherd

BP says hard to cut fuel prices for motorists despite surging profits Source link BP says hard to cut fuel prices for motorists despite surging profits

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