As families face soaring energy bills, the oil giant celebrates a 14-fold rise in profits, sparking fresh calls for a windfall tax.
Shell – the world’s fourth largest largest oil and gas company by market cap – has reported it quadrupled its annual earnings.
During the fourth quarter of 2021, Shell’s earnings were $11.1bn, compared to a loss of $4.5bn in 2020.
The company’s colossal profit rise comes as prices on wholesale markets are running at around four times higher than a year ago.
A ‘momentous year’
The company’s chief executive Ben van Beurden said it had been a “momentous year” for Shell, which also saw the firm relocate its tax residence from the Netherlands to the UK.
“We delivered very strong financial performance in 2021, and our financial strength and discipline underpin the transformation of our company,” said Ben van Beurden.
Shell says it plans to reward investors with an $8.5bn share buyback programme and 4% hike in dividends for the current quarter.
Ofgem announces steep rises in energy bills
As the energy giant celebrates a “momentous year” as it recovered from a loss-making 2020, regulator Ofgem has announced millions of people will pay an additional £693 a year on their energy bills from April.
The higher price cap will result in around 18 million households in England, Wales and Scotland paying an average £1,971 a year on gas and electricity.
At a time when energy bills are skyrocketing and household finances face the worse hit since 1970, Shell’s announcement that its annual profits have surged to around $20bn as oil and gas prices rise, has triggered fresh calls for a windfall tax on North Sea energy firms.
Fresh calls for a windfall tax
Labour is reiterating such demands as a means to support consumers who are struggling to pay their energy bills.
Ed Miliband, shadow secretary of state for climate and net zero, is making such requests, saying: “With oil and gas profits booming in recent months because of the spike in energy prices, it is clearer than ever that the North Sea oil and gas producers who have made a fortune recently should be asked to contribute.
“Our plan, part paid for with a one-off windfall tax on North Sea oil and gas profits, would save most households £200 off their bills, with targeted support of up to £400 on top of that to the squeezed middle, pensioners and the lowest earners.”
Calls echoed by Labour’s shadow Treasury chief secretary Pat McFadden, who said the figures underlined why a windfall tax was the best way to fund support on energy bills for households in Britain.
“They are planning share buybacks and increased dividends, but they are not being asked to pay a penny towards the package,” said Mcfadden.
Referring to the chancellor Rishi Sunak, the shadow Treasury chief secretary added: “He is not asking the oil and gas companies – who are making the most out of this – to pay a single penny towards this.
“Instead, he is doing it on a buy now, pay later way.”
The timing of the announcement has also been jumped on. As Jim Pickard, chief political correspondent with the Financial Times, tweeted:
“Somewhat awkward timing for Shell to be announcing a quadrupling of annual earnings to $19bn.”
Gabrielle Pickard-Whitehead is a contributing editor to Left Foot Forward
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