THE UK’s top energy generators are estimated to make more than £170 billion in excess profits over the next two years, leaked analysis from the Treasury has revealed.
The leak, reported in Bloomberg News, reportedly showed that about 40% of excess profits are set handed to the major power producers as energy providers are hit with rising wholesale costs.
The unpublished analysis shows the scale of excess profits, which is the difference between predicted profits and what the energy firms could have expected to make based on price projections from before Russia’s invasion of Ukraine.
The Treasury said: "We don't recognise this analysis."
A UK Government spokesperson said: "The Government has been clear that it wants to see the oil and gas sector reinvest its profits to support the economy, jobs, and the UK’s energy security.
"We also expect our newly introduced Energy Profits Levy to raise an extra £5bn pounds in its first year to help pay for our £37bn support package for households."
Opposition parties hit out at the revelation, calling such profits during a cost-of-living crisis "obscene" and "vulgar".
Scottish Labour Energy spokesperson Colin Smyth said “It is obscene that oil and gas giants will be making these eye-watering profits when people are being forced to choose between heating and eating.
“The Tories need to stop protecting these excessive profits and wake up to the scale of the crisis we face by backing Labour’s plans to extend the windfall tax and stop the catastrophic price hikes coming down the line.”
Scottish Green MSP Maggie Chapman said: "This is utterly obscene. Energy companies are raking in record profits while millions of their customers are being plunged into poverty and being forced to choose between freezing and starving. Some won't even have that choice - they'll suffer both. It is extreme greed and symptomatic of a broken system.
"Even a fraction of the money they these companies are pulling in could make a transformative difference to our country and our communities.
"The windfall tax that Rishi Sunak introduced was not fit for purpose. It was set far too low and gave companies a rebate if they increased North Sea drilling. By reversing the price cap rise and taxing wealth properly we can fund the just transition that we need and invest in the renewable jobs of the future.
"With the powers of independence we can take the companies into public ownership and ensure we have a system that works for people and planet rather than one that exists to further enrich a small number of already wealthy and powerful people."
Scottish Liberal Democrat economy spokesperson Willie Rennie MSP said: “As millions struggle to heat their homes and feed their families, these figures are utterly vulgar.
“Scottish Liberal Democrats have been long-standing advocates for a full windfall tax.
“The UK government should cancel the rise to the energy price cap and finance this cancellation through a windfall tax on the profits of oil and gas companies.
“Scottish Liberal Democrats would also introduce an emergency nationwide insulation programme to help bring down bills further.”
The leak follows increased scrutiny over the huge profits announced by some large energy producers amid the cost-of-living crisis.
There are increasing calls for another windfall tax on these profits after Ofgem announced the price cap will hit more than £3500 in October.
And there are warnings the average yearly household energy price could soar to more than £5000 in 2023.
This has led to calls for a price cap freeze, with a protest at Ofgem's office in Glasgow last week urging the UK Government to scrap late fees and halt price rises.
The regulator’s chief executive Jonathan Brearley has urged the incoming prime minister and new Cabinet “to provide an additional and urgent response to continued surging energy prices”, but the Government is waiting for the new Conservative leader to be in place before announcing further support.
The Bank of England has forecast that higher gas prices will push inflation above 13% by the end of the year, while Citigroup last week warned it could hit 18.6% in January, the highest in almost half a century.
Some experts are even predicting inflation could surge past 20% in the UK as the energy crisis mounts.
