Rishi Sunak and Jeremy Hunt will examine extending the windfall tax on gas and oil giants as they rake in massive profits while millions of households face a cold winter due to soaring energy bills, a Cabinet minister said on Thursday.
Oil giant Shell continued to build on 2022’s record results as it added nearly $10 billion in extra profit to its balance sheet as gas prices remained high.
The business said its adjusted earnings more than doubled to $9.5 billion (£8.2 billion) in the three months to the end of September when compared with the year before.
On Thursday morning, Tory party chairman Nadhim Zahawi stressed the Prime Minister and Chancellor would consider an extended windfall tax move as they make “tough decisions” to plug a blackhole in Britain’s public finances of tens of billions of pounds.
He stressed Mr Sunak had as Chancellor introduced the current windfall tax on energy producers which was raising £5 billion and was also designed to encourage them to invest in the UK.
Asked if it would be extended, Mr Zahawi told LBC Radio: “These are tough decisions and I know the Chancellor and the Prime Minister will be looking at everything.
Pressed again on this issue, he added: “I would not pre-empt any decisions but absolutely the Chancellor and the Prime Minister will look at every decision.”
Mr Hunt is due to present a full Autumn Statement, on tax and spend plans, on November 17.
Shell is now nine months into what promises to be the company’s most profitable year ever barring an unlikely major collapse in oil and gas prices over the next two months.
The business was already benefiting from a global economy that had reopened after the pandemic and was desperate for energy to fuel its growth.
Then Vladimir Putin launched an unprovoked attack on Ukraine. This pushed European gas prices to all-time highs and the price of oil soared internationally.
The months-long energy crisis led then Chancellor Sunak in May to introduce a windfall tax on oil and gas companies operating in the North Sea.
But that has not stopped Shell from handing billions of dollars to its shareholders this year.
On Thursday it announced plans to return another $4 billion (£3.5 billion) to shareholders by buying back shares over the next three months, and said it would also hike the dividend by 15 per cent.
It brings the total payout to Shell shareholders to $26 billion (£22.4 billion) so far this year.
Mr van Beurden said: “We continue to strengthen Shell’s portfolio through disciplined investment and transform the company for a low-carbon future.
“At the same time we are working closely with governments and customers to address their short and long-term energy needs.
“Today we are announcing a new share buyback programme resulting in an additional four billion dollars of distributions, which we expect to complete by our Q4 (fourth quarter) 2022 results announcement.”
